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Mortgage Offset Calculator Australia

Estimate how much an Australian mortgage offset could save in interest and time. Then compare offset, extra repayments and investing using the same cash and monthly budget.

Published by GrowThenDraw Editorial Team · Editorial policy · Methodology & sources

What do you want to see?

Loan and monthly choice

$
%
years
$

Available after the basic-loan repayment. Offset fees and any higher offset repayment reduce what remains; compare mode gives every strategy the same total monthly budget.

Offset product

$

In compare mode, the same starting cash goes against principal or into the investment portfolio.

$
%

Difference versus the cheapest otherwise-comparable loan available to you.

Estimated interest saved by the offset
$355,126
before $2,620 of entered package fees; estimated 8y 2m sooner
Estimated time saved
8y 2m
Interest with offset
$339,903
Interest without offset
$695,029
Saving after package fees
$352,506
Offset package cost check
$2,000

Estimated average offset balance needed in the first year to cover the entered fee and rate premium versus a comparable basic loan. This is a steady-balance screen, not a lender quote or a comparison with redraw.

Offset details
Scheduled repayment
$3,597
Offset interest saved
$355,126
Offset loan payoff
21y 10m
Starting balance charged interest
$580,000
Interest saved by offset: $355,126Interest paid with offset: $339,903
Interest saved by offsetInterest paid with offset
$300K$600KNow: mortgage without offset $600,000, effective debt after offset $580,000Now: mortgage without offset $600,000, effective debt after offset $580,0001 years: mortgage without offset $592,632, effective debt after offset $559,1861 years: mortgage without offset $592,632, effective debt after offset $559,1862 years: mortgage without offset $584,809, effective debt after offset $537,0892 years: mortgage without offset $584,809, effective debt after offset $537,0893 years: mortgage without offset $576,504, effective debt after offset $513,6283 years: mortgage without offset $576,504, effective debt after offset $513,6284 years: mortgage without offset $567,687, effective debt after offset $488,7214 years: mortgage without offset $567,687, effective debt after offset $488,7215 years: mortgage without offset $558,326, effective debt after offset $462,2775 years: mortgage without offset $558,326, effective debt after offset $462,2776 years: mortgage without offset $548,388, effective debt after offset $434,2026 years: mortgage without offset $548,388, effective debt after offset $434,2027 years: mortgage without offset $537,836, effective debt after offset $404,3967 years: mortgage without offset $537,836, effective debt after offset $404,3968 years: mortgage without offset $526,634, effective debt after offset $372,7518 years: mortgage without offset $526,634, effective debt after offset $372,7519 years: mortgage without offset $514,741, effective debt after offset $339,1559 years: mortgage without offset $514,741, effective debt after offset $339,15510 years: mortgage without offset $502,114, effective debt after offset $303,48610 years: mortgage without offset $502,114, effective debt after offset $303,48611 years: mortgage without offset $488,709, effective debt after offset $265,61711 years: mortgage without offset $488,709, effective debt after offset $265,61712 years: mortgage without offset $474,477, effective debt after offset $225,41312 years: mortgage without offset $474,477, effective debt after offset $225,41313 years: mortgage without offset $459,367, effective debt after offset $182,72913 years: mortgage without offset $459,367, effective debt after offset $182,72914 years: mortgage without offset $443,325, effective debt after offset $137,41214 years: mortgage without offset $443,325, effective debt after offset $137,41215 years: mortgage without offset $426,293, effective debt after offset $89,30115 years: mortgage without offset $426,293, effective debt after offset $89,30116 years: mortgage without offset $408,211, effective debt after offset $38,22216 years: mortgage without offset $408,211, effective debt after offset $38,22216y 8m: mortgage without offset $395,541, effective debt after offset $2,43016y 8m: mortgage without offset $395,541, effective debt after offset $2,43017 years: mortgage without offset $389,014, effective debt after offset $018 years: mortgage without offset $368,633, effective debt after offset $019 years: mortgage without offset $346,994, effective debt after offset $020 years: mortgage without offset $324,022, effective debt after offset $021 years: mortgage without offset $299,632, effective debt after offset $021y 10m: mortgage without offset $278,162, effective debt after offset $022 years: mortgage without offset $273,738, effective debt after offset $023 years: mortgage without offset $246,246, effective debt after offset $024 years: mortgage without offset $217,060, effective debt after offset $025 years: mortgage without offset $186,073, effective debt after offset $026 years: mortgage without offset $153,174, effective debt after offset $027 years: mortgage without offset $118,247, effective debt after offset $028 years: mortgage without offset $81,165, effective debt after offset $029 years: mortgage without offset $41,797, effective debt after offset $0Now6y12y17y22y28y30y
Effective debt charged interestReduction versus no offset

Year-by-year offset saving

Point in timeMortgage without offsetMortgage with offsetOffset cashEffective debt charged interest
Now$600,000$600,000$20,000$580,000
1 years$592,632$591,066$31,880$559,186
2 years$584,809$580,849$43,760$537,089
3 years$576,504$569,268$55,640$513,628
4 years$567,687$556,241$67,520$488,721
5 years$558,326$541,677$79,400$462,277
6 years$548,388$525,482$91,280$434,202
7 years$537,836$507,556$103,160$404,396
8 years$526,634$487,791$115,040$372,751
9 years$514,741$466,075$126,920$339,155
10 years$502,114$442,286$138,800$303,486
11 years$488,709$416,297$150,680$265,617
12 years$474,477$387,973$162,560$225,413
13 years$459,367$357,169$174,440$182,729
14 years$443,325$323,732$186,320$137,412
15 years$426,293$287,501$198,200$89,301
16 years$408,211$248,302$210,080$38,222
16y 8m$395,541$220,430$218,000$2,430
17 years$389,014$206,053$221,960$0
18 years$368,633$162,886$233,840$0
19 years$346,994$119,718$245,720$0
20 years$324,022$76,550$257,600$0
21 years$299,632$33,383$269,480$0
21y 10m$278,162$0$281,970$0
22 years$273,738$0$291,165$0
23 years$246,246$0$346,333$0
24 years$217,060$0$401,500$0
25 years$186,073$0$456,668$0
26 years$153,174$0$511,835$0
27 years$118,247$0$567,003$0
28 years$81,165$0$622,171$0
29 years$41,797$0$677,338$0
30 years$0$0$732,506$0
Current ASIC consumer check

Is your offset actually linked to the right loan?

ASIC reported on 29 July 2026 that banks had paid over $55 million in compensation for offset-account failures reported from September 2023 to August 2025. In the failure types identified by banks for ASIC's review, 55% involved an offset account that had been opened but not linked.

  1. 1. Confirm the account existsFind the offset in your bank app, online banking or statements.
  2. 2. Confirm the linked loanCheck it is attached to the correct home loan, especially after refinancing or switching products.
  3. 3. Confirm the benefitLook for evidence that the offset balance is reducing interest; ask the bank if the information is unclear.

This calculator estimates scenarios; it cannot access your accounts, verify a bank's daily calculation or determine that compensation is owed. Raise a suspected setup or linking problem with your bank. Official information rechecked 11 September 2026.

Transparent and reproducible

Calculation audit trail

The opening offset-saving result and the optional strategy comparison are generated by the same monthly engine used for live changes. In compare mode, each strategy receives the same starting cash and monthly household budget, so an apparent winner cannot be created by quietly contributing more to one path.

Opening verification example

$600,000 mortgage at 6% for 30 years, $1,000 spare cash per month, $20,000 cash available now and a 7% gross investment assumption.

Scheduled repayment
$3,597
Offset interest saved
$355,126
Offset net position
$732,506
Extra-repayment position
$736,561
Invest net position
$1,038,675
Gross break-even return
5.12%

Boundary checks maintained with the engine

  • The direct offset-saving view and the advanced comparison use the same tested mortgage engine.
  • In compare mode, offset, extra repayment and investing receive the same cash today and the same monthly household budget over the original loan term.
  • The offset remains a separate cash asset while interest uses the effective loan balance and entered package cost.
  • A higher offset repayment or package fee reduces that strategy's available cash; it is not funded outside the comparison.
  • After an early loan payoff, the freed shared budget accumulates as cash through the original comparison date.
  • The investment path deducts the entered fee and tax drag before solving the gross return required to match the offset.

Method reviewed 11 September 2026. Read the broader calculation methodology and the MoneySmart sources below.

An offset saves mortgage interest without reducing access to cash

A 100% offset account reduces the loan balance used to calculate interest. The saving behaves like a tax-free return equal to the mortgage rate because it is interest avoided rather than investment income.

The economic benefit can be reduced by account fees or a higher package rate. Enter both explicitly. Redraw is different from an offset, and legal or tax consequences can differ—especially if a former home later becomes an investment property.

Start with the direct offset saving, then compare strategies

The default view answers the common offset question first: how much interest and time the entered balance and monthly spare cash could save. Package fees and any higher offset-loan rate stay visible instead of being hidden inside a headline saving.

The comparison allocates your cash available now to the offset, directly against principal, or to the investment portfolio. Each path then receives one shared household budget: the basic-loan repayment plus your entered spare cash. An offset package fee or higher required repayment reduces what remains for that strategy rather than quietly increasing its budget.

The offset balance remains a cash asset. Extra repayments reduce debt faster. After either loan is repaid, the same monthly budget continues into cash until the original comparison date. The invest scenario keeps the basic scheduled loan and accumulates a portfolio after the entered fee and annual tax-drag assumption.

The break-even return makes risk visible

The calculator solves the gross annual investment return that would be needed for the investment portfolio to equal the offset result after the fee and tax-drag assumptions. Returns above that figure are not guaranteed and may arrive unevenly.

Australian lenders commonly calculate interest daily while this educational comparison uses a monthly approximation and a constant rate. Use your lender's product sheet for exact interest, repayment and offset eligibility.

Frequently asked questions

How much interest and time can a mortgage offset save?

It depends on the loan balance, rate, remaining term, offset balance and how that balance changes. The calculator compares the entered scenario with the same loan without an offset and shows estimated interest and time saved. It uses monthly modelling, while many lenders calculate interest daily.

Does an offset account reduce my mortgage repayment?

Usually the scheduled repayment does not automatically fall. Instead, less of each repayment goes to interest and more reduces principal, which can shorten the loan. Your lender's contract and repayment settings control the actual treatment.

Is money in an offset account the same as making extra repayments?

Both can reduce interest, but an offset is a separate transaction account while an extra repayment reduces the loan. Access, fees, redraw conditions and future tax consequences can differ.

What return does an offset account earn?

It does not pay interest. Its gross economic benefit is approximately the mortgage rate because it avoids non-deductible interest, before offset fees or any higher loan rate.

Does the calculator include investment tax?

It uses your editable annual tax-drag assumption after investment fees. It cannot model the timing of distributions, franking credits, capital gains, losses or your exact marginal rate.

Why might extra repayments beat an offset?

An offset can have fees or a rate premium, while direct extra repayments may not. Extra repayments also enforce less liquidity, which can help or hurt depending on your needs.

How much money should I keep in an offset account to cover its fee?

The calculator shows a first-year screening estimate for the average offset balance needed to cover the entered package fee and rate premium versus a comparable basic loan. It assumes a steady loan and offset balance, so it is a guide rather than a lender quote.

Are the results exact to my lender statement?

No. The model uses monthly interest and fixed rates; many lenders calculate interest daily and product conditions vary.

How can I check whether my offset account is actually linked?

ASIC says to check your bank app, online banking or statements for the offset account, the correct linked home loan and evidence that the balance is reducing interest. After refinancing or switching products, ask whether the account needs to be relinked. This calculator cannot inspect or verify your bank account.

Rules verified 11 September 2026 against official Australian sources:

Educational estimate only—not financial, credit or tax advice. Confirm product rules, eligibility, rates, fees and account data with your lender or a licensed professional.