Home Mortgage Offset Calculator
Mortgage Offset Calculator Australia
This free mortgage offset calculator shows how much interest an offset account could save on an Australian home loan. Enter the loan amount, interest rate, term and offset balance to see the repayment, total interest and loan term with and without the offset. Add extra repayments or an interest-only period to compare your options.
In short
An offset account lowers the interest on a home loan because interest is charged on the loan balance minus the offset balance. This free mortgage offset calculator shows repayments, total interest and the loan term for your own numbers, with up to 10 staged extra repayment rules.
General information only. It is an estimate based on the numbers you enter. The RBA raised the cash rate target to 4.60% on 29 September 2026 (Reserve Bank of Australia, checked 28 October 2026).
For an investment loan, the national gross rental yield was 3.85% in September 2026 (Cotality, checked 28 October 2026). The national residential vacancy rate was 1.4% in September 2026 (SQM Research, checked 28 October 2026). Advertised rents were 7.6% higher than a year earlier in the 30 days to 12 October 2026 (SQM Research, checked 28 October 2026).
Property calculators
Mortgage offset calculator
Enter the loan amount, interest rate and term, then add your offset balance and any extra repayments. The calculator compares the repayment, total interest and loan term with and without them, so you can see the interest saved. The yield tab checks the rent on an investment property.
Enter the core mortgage assumptions
Pick the main loan settings first, then add staged repayment or offset rules below.
Create up to 10 staged strategies
Each rule can go to the loan or the offset, run on its own contribution frequency, and optionally reuse offset money later.
How the mortgage behaves
This explains the structure in plain language.
Mortgage outcome summary
See the current repayments first, then the full-loan totals underneath.
Quick decision filters
Make the mortgage easy to understand
These figures are all calculated from the current scenario and converted correctly from the selected base repayment frequency.
Open the live schedule and expenditure timeline
The schedule follows the selected base repayment frequency and shows the active offset balance, direct extra repayments, and staged offset adds.
Rental yield inputs
This now follows the same visual system as the mortgage calculator so the controls feel consistent and the numbers are easier to read.
Model the debt position clearly
The loan inputs now use the same controls as the mortgage calculator and update the yield and cash flow instantly.
Keep the operating costs in one place
Property management is applied as a percentage of collected rent after vacancy. All other costs below are annual dollar amounts.
Readable results at a glance
All yield percentages below are calculated against the current property value.
Cleaner income, expense, and cash flow view
Property management stays separate, while the smaller holding costs are rolled into one annual expense line so the page stays shorter and easier to scan.
The core figures the rest of the yield breakdown runs from.
This shows the rent before and after vacancy is allowed for.
Property management stays separate, and the smaller holding costs stay grouped together.
This is where the income, operating expenses, and loan costs come together.
All yield percentages are calculated against the current property value.
Worked example
How much does an offset account save?
Interest is charged on the loan balance minus the offset balance. Moneysmart's example is a $500,000 loan with $20,000 in the offset, charged interest on $480,000. In our worked example, a steady $50,000 offset on a $650,000 loan at 6.19% saves about $217,400 in interest and finishes the loan about four and a half years sooner.
| Offset balance | Total interest | Interest saved | Paid off sooner |
|---|---|---|---|
| $0 | $781,700 | None | None |
| $20,000 | $683,400 | $98,300 | 2 years |
| $50,000 | $564,200 | $217,400 | 4 years 6 months |
| $100,000 | $415,900 | $365,700 | 7 years 7 months |
Illustrative example only. It assumes a principal and interest loan with a monthly repayment of about $3,977, interest worked out monthly, a fixed rate of 6.19%, an offset balance held steady for the whole loan and an unchanged repayment. Real loans usually charge interest daily and rates change, so enter your own numbers in the calculator. Moneysmart explains the daily interest rule (Moneysmart, checked 28 October 2026). General information only, not financial advice.
How it works
How to use the mortgage calculator
To use the calculator, enter your loan amount, interest rate and loan term, choose principal and interest or interest only, then add your offset balance and any extra repayments. The results compare the repayment, total interest and loan term with and without them. Change one number at a time to see what matters most.
- 1Enter the loan
Add the loan amount, interest rate and loan term in years.
- 2Pick the repayment type
Choose principal and interest, or interest only for a set number of years first.
- 3Add extra repayments
Add staged rules that send extra money to the loan or to the offset.
- 4Read the result
Compare the repayment, total interest and loan term with and without your extra repayments.
Rates and fees change, so check your own loan contract and speak with a licensed mortgage broker or financial adviser before you decide.
Buying an investment property? Check the rent first with the rental yield calculator, see the weekly profit after the loan in the Airbnb rental property cash flow calculator, or estimate income with the Airbnb revenue estimator. Our Airbnb buyers agent team can also help you find the property.
Compare
Offset account, redraw or extra repayments?
An offset account keeps your savings in an account you can use while reducing the interest charged on the loan. A redraw facility puts extra repayments straight onto the loan, and you may be able to withdraw them, depending on your loan terms. Use the calculator to compare each option, and check your lender's fees.
| Option | How it cuts interest | Access to the money |
|---|---|---|
| Offset account | The balance is subtracted from the loan before interest is charged | Stays in an account you can use, like an everyday account |
| Redraw facility | Extra repayments go straight onto the loan | You may be able to withdraw them, depending on your loan terms |
| Extra repayments | The loan balance falls, so less interest is charged from then on | Can be harder to take back out, depending on your loan |
Fees matter. Moneysmart says some lenders charge package fees, higher rates or monthly fees for loans with an offset, and that you should compare those costs with the interest you expect to save (Moneysmart, checked 28 October 2026).
Rates
What interest rate should I enter?
Use the interest rate on your own loan. For a guide, the RBA's lenders' interest rates table shows an average of 6.21% on outstanding owner-occupier housing loans and 6.44% on investment loans in August 2026. The RBA lifted the cash rate target to 4.60% on 29 September 2026. Lenders set their own rates, so check yours.
| Loan type | Average rate a year |
|---|---|
| Owner-occupier, all loans | 6.21% |
| Owner-occupier, principal and interest | 6.19% |
| Owner-occupier, interest only | 6.85% |
| Investment, all loans | 6.44% |
| Investment, principal and interest | 6.38% |
| Investment, interest only | 6.57% |
| RBA cash rate target from 30 September 2026 | 4.60% |
The 6.21% owner-occupier and 6.44% investment averages include variable and fixed rate loans (RBA lenders' interest rates, August 2026, checked 28 October 2026). The 4.60% cash rate target is from the RBA media release of 29 September 2026 (Reserve Bank of Australia, checked 28 October 2026). The calculator starts at 6.19%, the owner-occupier principal and interest average, so change it to your own rate.
Mortgage calculator: common questions
These questions cover how an offset account works, how much it can save, and how it compares with redraw and extra repayments. They also cover interest-only loans, investment loans, tax and the current cash rate. Each answer is short, so you can check it quickly and then test your own numbers in the calculator above.
How does an offset account save interest?
An offset account is a transaction or savings account linked to your home loan. Interest is worked out on the loan balance minus the offset balance, so the more you keep in the offset, the less interest you pay.
What is the difference between principal and interest and interest only?
With principal and interest repayments you pay off some of the loan each time as well as the interest. With interest only repayments you pay just the interest for an agreed period, so the loan balance stays the same, and repayments usually rise when the loan changes to principal and interest.
Do extra repayments save interest?
Yes. Extra repayments reduce the loan balance sooner, so less interest is charged from then on and the loan can finish earlier. The calculator lets you add staged rules to see the effect.
Can I model more than one extra repayment plan?
Yes. You can create up to 10 staged strategies. Each rule can go to the loan or the offset and run on its own contribution frequency.
Is this financial advice?
No. It is a general information tool that gives estimates from the numbers you enter. For advice on your own situation, speak with a licensed financial adviser or mortgage broker.
What is a mortgage offset calculator?
It works out how much interest and time an offset account could save on your loan. You enter the loan amount, interest rate, term and offset balance, and it compares the loan with and without the offset.
How do I work out how much an offset account saves?
Interest is charged on the loan balance minus the offset balance. For example, a 500,000 dollar loan with 50,000 dollars in the offset is charged interest as if the loan were 450,000 dollars. The calculator does this across the whole loan term using your own rate and repayments.
Can I use it for an investment property loan?
Yes. You enter your own loan amount, interest rate, term and repayment type, so you can model a home loan or an investment loan, including an interest-only period. Check how your own lender treats offset balances and interest-only terms.
Show 6 more questionsShow fewer questions
Is it better to pay extra into the loan or the offset?
Both reduce the interest charged. Money in the offset stays available to you, while extra repayments may be harder to take back out, depending on your loan. The calculator lets you send each staged rule to the loan or the offset so you can compare the two.
What is the difference between an offset account and a redraw facility?
An offset account is a linked account whose balance is subtracted from the loan before interest is charged, and the money stays in your account. A redraw facility holds extra repayments you have made on the loan, and you may be able to withdraw them, depending on your loan terms. Moneysmart describes both.
How much should I keep in my offset account?
Moneysmart says an offset may not be worth paying for if the balance is always low, for example under $10,000, and the loan has higher fees or a higher rate than similar loans without an offset. Compare the fees with the interest you expect to save, using your own numbers in the calculator.
Do I pay tax on the interest an offset account saves?
Moneysmart notes that you do not earn interest on money in an offset account. Instead, you save by paying less interest on the loan. On an investment loan, less interest paid also means less interest to claim as a deduction. How this applies to you is a tax question, so ask your accountant.
Does an offset account work on an interest only loan?
The calculator can model an interest-only period with an offset balance, so you can see the effect. Moneysmart says an offset is generally available with a variable rate home loan. Whether it applies during an interest-only period depends on your lender and loan, so check your loan terms before you rely on it.
What is the RBA cash rate target after the September 2026 decision?
The RBA raised the cash rate target by 0.25 percentage points to 4.60% on 29 September 2026 (RBA, checked 28 October 2026). Lenders set their own home loan rates, so your rate can differ. Enter your own rate in the calculator, then try a higher and a lower rate to see how much the repayment changes.
Facts checked 28 October 2026.
- The Reserve Bank raised the cash rate target by 0.25 percentage points to 4.60% on 29 September 2026 (Reserve Bank of Australia, checked 28 October 2026).
- The RBA's lenders' interest rates table shows an average of 6.21% on outstanding owner-occupier housing loans and 6.44% on investment loans in August 2026, including fixed and variable rate loans (Reserve Bank of Australia, checked 28 October 2026).
- The RBA says most mortgagors hold large savings buffers in offset and redraw accounts, and the median borrower could cover more than a year of scheduled mortgage payments at current interest rates from these buffers (Reserve Bank of Australia Financial Stability Review, October 2026, checked 28 October 2026).
- Interest on most home loans is calculated daily, and each day the lender subtracts the offset balance from the loan balance first. On a $500,000 loan with $20,000 in the offset, interest is charged on $480,000 (Moneysmart, checked 28 October 2026).
Want a hand with the numbers?
Book a free 15-minute call and we will talk through your loan, your property goals and your next purchase. Our team can help you plan an investment property purchase with the rent, costs and loan checked before you buy. Phone 0434 211 016, Monday to Friday 8am to 5:30pm and Saturday 8am to 12pm.