Home » Home Loan Offset Calculator

Home Loan Offset Calculator

Calculator

Our Home Loan Offset Calculator helps you understand how an offset account can reduce the interest payable on your mortgage. By placing your savings in an offset account, you can lower your loan balance and reduce both your monthly repayments and the total interest paid over the life of the loan. This tool calculates how much time and money you can save by utilising an offset account, providing you with insights to make informed financial decisions.

Home Loan Repayment Calculator With Offset

Step 1

Enter Your Loan Details

Loan Amount: Input the total loan amount you’ve borrowed or plan to borrow.
Interest Rate: Enter the interest rate for your home loan.
Loan Term: Specify the number of years over which you’ll be repaying the loan.
Repayment Frequency: Select how often you make repayments (monthly, fortnightly, or weekly).

Step 2

Enter Your Offset Account Details

Offset Account Balance: Add the amount you currently have or plan to keep in your offset account. This amount reduces the interest calculated on your loan.

Step 3

View Your Results

Monthly Repayment: The adjusted monthly repayment after factoring in your offset balance.
Interest Saved: The total amount of interest saved by using the offset account.
Time Saved: The number of years and months shaved off your loan term due to the offset account’s impact.
Revised Time: Your new, shortened loan term with the offset account balance factored in.

Explanations of Key Terms

Loan Amount: The total amount borrowed for your home loan.
Interest Rate: The percentage charged on your loan amount by the lender.
Loan Term: The length of time over which you will repay your loan, typically 15, 20, or 30 years.
Repayment Frequency: How often you make loan repayments (monthly, fortnightly, or weekly).
Offset Account Balance: The amount in your offset account, which directly reduces your loan balance, thereby lowering the interest charged on your loan.
Interest Saved: The amount of interest saved over the life of the loan by using the offset account.
Time Saved: The reduction in the overall loan term thanks to the interest savings from your offset account.

FAQ

What is an offset account, and how does it work?

An offset account is a savings or transaction account linked to your home The balance in the offset account reduces your loan balance, meaning you only pay interest on the difference.

How does an offset account save me money?

By reducing the loan balance on which interest is calculated, an offset account helps you save money on interest Over time, this can also reduce the loan term.

Can I use this calculator if I plan to add more to my offset account over time?

This calculator is based on the current offset balance, but you can manually adjust the balance to see how different savings levels affect your results.

Will I see a difference if I have a small offset balance?

Yes, even small amounts in an offset account can save you money over time, especially on long-term loans. The more you have in the account, the greater the savings.

Is an offset account available with all home loans?

Not all loans come with an offset account feature, so it’s important to check with your lender to see if this option is available with your loan type.

Example Scenarios

Example 1

Let’s say you have a $400,000 home loan at 6% interest over 30 years. By keeping $20,000 in an offset account, you could save $87,729.59 in interest and reduce your loan term by 3 years. Instead of paying off your loan in 30 years, you’d be debt-free in 27 years.

Disclaimer

Please note: The results provided by this calculator are estimates only and should be used for informational purposes. Always consult with a financial expert before making any decisions based on the results.

Ready to see how much you could save?

Use our Home Loan Offset Calculator to get a personalised estimate and find out how an offset account could benefit your financial future. For expert advice on mortgage and offset accounts, contact us today.