Offset Account Calculator
Make your offset work harder
A Rovo broker can help you find a loan with the best offset features for your situation.
This calculator provides estimates only. Actual savings depend on your lender's offset terms, rate type, and repayment behaviour. Rovo Finance (NJ IT PTY LTD ABN 67 654 854 378) CCR 570633 of Broker ACL Pty Ltd ACN 681 761 375 (ACL 563763).
Offset account calculator Australia, see exactly how much you save
An offset account is a transaction account linked to your home loan. The balance in the account is “offset” against your loan balance when calculating daily interest, reducing the amount of interest you pay without actually paying down the loan. Enter your loan details and offset balance above to see precisely how much interest you save and how many years it cuts off your loan term.
How does an offset account work?
If your home loan balance is $500,000 and your offset account holds $50,000, the lender charges interest on $450,000, not $500,000. At 6.25%, that reduces your monthly interest by roughly $260, saving you over $31,000 in interest and cutting approximately 2.3 years off a 25-year loan.
Your money in the offset account remains fully accessible, you can spend it, receive salary into it, or withdraw at any time. Unlike making extra repayments, the offset gives you the same interest saving while keeping your cash liquid. This makes it ideal for emergency funds, savings goals, or any money you may need access to.
Offset account vs redraw facility
Offset account
Separate transaction account. Interest reduced daily on the linked loan. Funds remain fully accessible like a regular bank account. No approval needed to access your money. Better for investment properties (interest deductibility is preserved). Usually available on variable rate loans.
Redraw facility
Access to extra repayments you’ve made on your loan. Reduces your actual loan balance (slightly different tax implications for investors). Some lenders restrict redraw amounts or charge fees. Access may require lender approval. Slightly simpler to understand but less flexible.
For most owner-occupiers, an offset account and a redraw facility achieve the same interest saving. For property investors, the offset account is generally preferred because extra repayments reduce the loan balance (and therefore the deductible interest), while an offset account keeps the loan balance unchanged.
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FAQs
Offset loans usually have a slightly higher interest rate (0.10–0.30% more). The offset becomes worthwhile only if you keep enough money in the account to cover that rate difference. On a $500,000 loan, a 0.15% premium costs about $62/month, meaning you need around $15,000–$20,000 in the offset to break even. With $50,000 or more, the offset almost always wins.
Some lenders allow multiple offset accounts linked to one loan, which is useful for budgeting (e.g., bills, savings, emergency fund). All linked balances reduce your interest. Not all lenders offer this feature, so a Rovo broker can help you find one that matches your preferred structure.
No. Offset savings are not taxable because they reduce interest charged rather than earning interest. This makes offsets more tax‑efficient than savings accounts, especially for borrowers on higher marginal tax rates.
Most fixed rate loans do not offer full offset accounts. Some offer partial offsets, usually capped at around 10% of the loan balance. Variable loans almost always allow full offset. A split loan (part fixed, part variable with offset) is a common solution.
Maximise savings by keeping as much money as possible in the offset for as long as possible. Strategies include directing your salary into the offset, using a credit card (paid in full monthly) for daily spending, consolidating savings into the offset, and avoiding unnecessary withdrawals. Increasing your offset balance from $30,000 to $80,000 can cut 2–4 years off a standard mortgage.