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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.
Extra repayment, offset and redraw rules vary by lender and loan type — always confirm the specific terms and any fees or caps with your loan provider.
This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.
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, in dollars of interest and in years off the loan term, for your actual loan size, rate and term rather than a generic example.
All three strategies work the same way mechanically — they reduce the principal your interest is calculated on, sooner than the standard schedule would — the differences between them come down to flexibility and access to the money, not the underlying maths.
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).
Earlier is better — you save interest from that point. But don't sacrifice your emergency fund.
An offset is a separate transaction account linked to your loan; the balance offsets the loan balance for interest purposes but stays fully accessible like a normal bank account. Redraw lets you take back extra repayments you've already made, but access can be slower, sometimes restricted, and occasionally fee-charged, since the money has actually gone into the loan rather than sitting alongside it.
Yes — most people do. A common approach is keeping an emergency buffer in an offset account for flexibility, making extra repayments from ongoing surplus income, and applying any windfalls (bonus, tax refund) as lump sums as they arrive.
Both, on most variable loans — the extra amount reduces principal immediately, so unless you specifically request otherwise your minimum required repayment stays the same and the loan simply finishes earlier. Some lenders let you 'recalculate' repayments down instead, which keeps the original term but reduces the interest saving.
It depends on the loan. Most variable-rate loans allow unlimited extra repayments, but fixed-rate loans commonly cap additional repayments (often around $10,000-$30,000 a year) and can charge a break fee if you exceed the cap or pay off the loan early — check your loan contract before assuming the same flexibility.
Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.
This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.
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Why these default assumptions are reasonable
This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.