Which saves more: offset or extra repayments?

For the same dollar amount, the interest saving is similar. Offset gives you access to the money; extra repayments may be locked in (unless you have redraw).

When should I pay a lump sum?

Earlier is better — you save interest from that point. But don't sacrifice your emergency fund.

Mortgage Strategy Optimiser

Compare extra repayments, offset and lump sums side by side

See how different strategies reduce your total interest and loan term. Add extra repayments, an offset balance or a lump sum to compare.

Loan & Strategies

Enter your loan details and optional strategies to compare

Loan amount ($)

Interest rate (%)

Term (years)

Repayment frequency

Optional strategies

Extra repayment per period ($)

Offset balance ($)

Lump sum ($)

In year

Strategy comparison

No extra repayments

Total interest$637,722

Term30.0 years

Extra 500/monthly

Total interest$412,530

Term20.8 years

Interest saved$225,192

Offset 50,000

Total interest$413,059

Term24.1 years

Interest saved$224,664

Lump sum 10,000 in year 2

Total interest$589,173

Term28.5 years

Interest saved$48,550

How to Use This Calculator

1Enter your loan amount, rate and term
2Add extra repayments, offset balance or a lump sum to compare strategies
3See total interest and years saved for each strategy

What is a mortgage strategy?

Your repayment strategy affects how much interest you pay. Making extra repayments, using an offset account or paying a lump sum all reduce the balance faster, so you pay less interest and may pay off the loan sooner.

This tool compares these strategies side by side so you can see which saves the most.

Which strategy saves most?

Extra repayments: Regular extra payments reduce principal and compound over time. Even small amounts help.
Offset: An offset reduces the balance you're charged interest on. Flexible — you can withdraw if needed.
Lump sum: A one-off payment (e.g. tax refund, bonus) reduces the balance and saves interest from that point.

Things to consider

•Combine strategies: use offset for flexibility and make extra repayments when you can.
•Check if your loan has redraw — similar to offset but less flexible.
•Some loans charge fees for extra repayments; factor that in.

Frequently Asked Questions

Official Sources

Moneysmart – home loans

Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.

Rates and thresholds last updated for the 2024–25 financial year.

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