Offset Account Savings Calculator

Demonstrates how offsetting savings against a mortgage can reduce interest costs and accelerate repayment timelines

Loan Amount

Interest Rate (% p.a.)

Loan Term (Years)

Offset Account Balance

Total Interest Saved

$63,772

Time Saved on Loan

7 years 2 months

Without Offset

$637,722

Total interest

With Offset

$573,950

Total interest

How Offset Accounts Work

Link Your Savings

Your savings account is linked to your home loan.

Reduce Interest

Interest is only charged on the loan balance minus your offset balance.

Keep Access

You can still access your savings anytime - they're not locked in.

Your Scenario

With a $500,000 loan at 6.5% and $50,000 in your offset account, you're effectively only paying interest on $450,000. This saves you $63,772 in interest over the life of the loan and reduces your loan term by 7 years and 2 months.

Why offset accounts can be so effective

An offset account reduces the loan balance that interest is calculated on, while still letting you keep access to your cash. That makes it attractive for borrowers who hold meaningful savings but want flexibility.

Interest is charged on the loan less the linked offset balance.
You still retain day-to-day access to the money in the offset account.
The bigger and more consistent the offset balance, the stronger the saving effect.

When an offset structure makes sense

Offset accounts tend to work best for borrowers with stable savings habits, variable cash reserves, or income patterns that leave meaningful funds sitting in the bank between bills and repayments.

They can suit emergency-fund savers who do not want to lock funds away.
They are often compared with revolving credit as an alternative structure.
Fees and product differences should still be checked before switching.

Offset account FAQs

What does an offset account actually do?

It reduces the portion of your mortgage balance that interest is charged on by linking eligible savings to the home loan.

Is an offset account better than leaving savings in a normal account?

Often yes for mortgage holders, because the interest saved on home lending can be more valuable than the interest earned in a standard savings account.

Do I lose access to money in an offset account?

No. In most cases the funds remain accessible, which is one of the main reasons offset structures appeal to borrowers who want flexibility.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Actual loan terms, rates, and eligibility may vary. Please contact a Mortgage Lab adviser for personalised advice.