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See how much interest you save by keeping savings in an offset account
Interest is charged on your loan balance minus your offset balance. Same repayment each month — more goes to principal when you have an offset, so you pay off the loan faster and save interest.
Money in your offset reduces the balance on which interest is calculated. Same repayment amount each month.
If you put the same money in a savings account instead, you'd earn this much interest. Offset usually wins because loan rates are higher than HISA rates.
$88,882 in today's dollars
If you put the same money in a savings account
A savings account at the rate you entered would earn about $88,378 in interest over the same period, before any tax on that interest. The offset saves $150,208 on the loan instead. On these figures, the offset leaves you $61,830 ahead of the savings account. Interest saved on a loan is not taxable income, while savings account interest is — this comparison is before that tax, so the gap after tax could be different from what is shown here.
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.
An offset account is a transaction or savings account linked to your home loan. The balance is 'offset' against your loan — you're charged interest only on (loan balance minus offset balance). Your repayment amount usually stays the same, so more of each payment goes to principal and you pay off the loan faster.
Not all loans have offset; full offset is most valuable. Some products offer partial offset (e.g. 50%). This calculator assumes 100% offset.
Usually yes. You 'earn' at the loan rate (e.g. 6%) tax-free by reducing interest, whereas savings interest is often taxable. Loan rates are typically higher than HISA rates, so the offset usually wins.
Usually no. The repayment stays the same; more of it goes to principal, so you pay off the loan faster and pay less total interest.
Redraw lets you pay extra off the loan and redraw later. The interest saving is similar. Offset is often more flexible (instant access like a transaction account).
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.
What can move this result
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.