Offset Account Calculator
See how much interest and time an offset account saves over the life of your mortgage.
How Offset Accounts Work
An offset account is a transaction or savings account linked to your home loan. The balance in the account is “offset” against your loan balance before interest is calculated each day. So if you owe $500,000 and have $60,000 in your offset account, you only pay interest on $440,000.
Offset accounts are particularly powerful when you keep your salary, savings, and any extra funds in them. Unlike making extra repayments, the money remains accessible — you can withdraw it any time. This makes it both a savings strategy and an emergency fund simultaneously.
Frequently Asked Questions
Every dollar in your offset account reduces the balance your mortgage interest is calculated on. With $50,000 in offset against a $500,000 loan, you pay interest on $450,000 only — saving thousands annually.
Generally yes if you keep a meaningful balance in it. A $50,000 offset at 6% saves $3,000/year in interest — far more than the typical $10-20/month account fee.
An offset account reduces interest daily and funds remain accessible anytime. Redraw lets you access extra repayments made but the lender controls access and may charge fees. Offset is generally more flexible.