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Offset account calculator.

An offset account is a transaction or savings account linked to your home loan. Its balance is offset against the loan, so you are charged interest only on the difference. Enter your loan and what you keep in your offset, and the calculator shows the interest you would save and how much sooner you would repay the loan, with an optional monthly top-up.

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How this calculator works.

  1. Your scheduled repayment is the normal principal & interest repayment for your balance, rate and remaining term, worked out as if there were no offset. It stays the same.
  2. Each month the calculator charges interest on the loan balance less the offset balance. Because less interest is charged, more of the same repayment goes to principal.
  3. If you add money to the offset each month, the offset balance grows and the effect builds.
  4. The loan is cleared when the repayments have paid the balance to zero. Interest saved is the interest without an offset less the interest with it.

What it assumes

  • The starting scenario is a loan of $450,000 at 6.44% (the RBA average new variable rate for Jul 2026, adjusted for the 30 Sep rise) with 25 years left and $30,000 in the offset.
  • The interest rate is held constant, and the money stays in the offset for the life of the loan.
  • Fees or a higher rate on loans with an offset are not included. Use the home loan comparison calculator for those.
  • Assumptions last reviewed 25 September 2026.

Questions people ask.

How does an offset account work?

An offset account is linked to your home loan. Each day the lender takes its balance off your loan balance before working out interest. If you owe $450,000 and have $30,000 in the offset, you are charged interest on $420,000. Your repayment stays the same, so more of it pays down the loan.

How much could an offset account save me?

With the starting numbers, $30,000 in the offset saves about $102,895 in interest and clears the loan 2 years and 10 months sooner. Keeping the money there for the whole loan is what makes the saving large.

Is an offset account better than making extra repayments?

Both cut the interest you pay. Extra repayments go straight to the loan and can only be taken back if your loan has redraw. An offset lets you keep your cash accessible while it works for you. The extra repayments calculator shows the other side.

Do offset accounts cost more?

Sometimes. A loan with an offset can carry a higher rate or an annual package fee, which can cancel out part of the saving. Compare the whole cost with the home loan comparison calculator.

Is the interest I save on an offset account taxable?

For a home you live in, no: you are charged less interest rather than earning any, so there is nothing to declare. On an investment loan, an offset reduces the interest you pay and therefore the interest you can deduct. Ask your accountant how it applies to you.

What if my offset balance is bigger than my loan?

Then no interest is charged while the offset covers the whole balance, and the calculator counts those months. You could also close the loan with the money, which the calculator does not assume.

More calculators.

Offset Account Calculator | Siare