Offset Account Savings Calculator
Calculate the interest saved and years shaved off your mortgage by keeping cash in a 100% offset account.
Last reviewed by the myCalculator Editorial Team
Input Parameters
Use your average balance across the month, not the peak on payday.
Calculation Results
Next: related Home Loans calculators
Extra Mortgage Repayments Calculator
Calculate how extra repayments shorten your 30-year home loan and save tens of thousands in interest.
Mortgage Refinance Savings Calculator
Determine if switching home loan lenders saves money after discharge and application fees.
Loan Payoff, Extra Repayment & Amortization Schedule Calculator
Complete loan payoff and accelerated amortization schedule calculator. See exact debt-free date, interest saved, and month-by-month loan balance reduction curves.
Formula & How Offset Account Savings Calculator Works
A 100% offset account is a transaction account linked to your home loan. Interest is calculated daily on the loan balance minus the offset balance, so every dollar sitting in offset saves interest at your full mortgage rate. Because that saving is avoided interest rather than earned income, it is not taxable — making offset materially better than a savings account for most borrowers. Worked example: on a $500,000 loan at 6% over 25 years, keeping $30,000 in an offset account saves 30,000 × 6% = $1,800 of interest in the first year. If that balance stays in the offset for the whole term, the loan clears in about 22.7 years instead of 25 and total interest falls by roughly $92,700. The saving is the same as an equal extra repayment, but the cash stays available to you.
- Enter Home Loan Balance ($) ($): Input your target parameter value.
- Enter Interest Rate (% p.a.) (%): Input your target parameter value.
- Enter Remaining Loan Term (Years) (years): Input your target parameter value.
- Enter Average Offset Balance ($) ($): Input your target parameter value.
- Apply Formula: Calculate using
Interest charged = (Loan Balance - Offset Balance) × daily rate | Savings = Offset × rate. - Review Results: View exact computed answers, metrics, and worked mathematical proofs.
Need this calculator for your blog, publication, or client portal?
Get pre-formatted embed codes, Markdown citations for forums (Reddit/Whirlpool), or HTML anchor tags free.
Frequently Asked Questions (FAQs)
Is an offset account better than a savings account?
Usually yes. Offset savings are untaxed avoided interest, so a 6% mortgage rate is equivalent to a savings account paying around 8.8% before tax for someone on the 32% marginal rate.
Is an offset account better than redraw?
They save the same interest, but offset keeps the money as your own savings. Redraw repayments become bank funds you request back, which can be restricted and can complicate investment loan deductibility.
Embed Offset Account Savings Calculator on Your Site
Offer your readers, students, or clients interactive calculations. Fast, responsive, and 100% free with no login required.
Widget Customizer
Recommended for publishers & educational portals to provide source citation.
Authoritative Standards & Verified Reference Citations
Calculations and mathematical logic on this page are grounded in published statutory rules, regulatory standards, and official government data published by the following bodies:
Consumer guidance on mortgage borrowing capacity, compound interest formulas, and loan fees.
Official cash rate target announcements, monetary policy statements, and national economic statistical data.
Official U.S. Federal Funds Rate and comprehensive macroeconomic time-series data.
Key Eurozone interest rates, deposit facility rates, and monetary policy operations.
Residential mortgage serviceability buffer framework (3.0% stress test hurdle rate).
Dedicated Australian home loans, borrowing capacity, mortgage repayments & refinance modeling.