Offset Account Calculator Australia — Interest Saved & Loan Time Reduced 2026
Real-World Examples — 2026
$50,000 offset on a $550,000 loan at 6.3%
Keeping $50,000 in an offset account against a $550,000 loan at 6.3% over 28 remaining years saves approximately $87,000 in interest and cuts the loan term by approximately 3 years and 4 months. The monthly interest saving is approximately $263.
$100,000 offset — dual-income household
A dual-income household that parks $100,000 (combined savings and buffer) in the offset account on a $600,000 loan at 6.3% over 30 years saves approximately $195,000 in total interest and pays off the loan approximately 6.5 years earlier.
Frequently Asked Questions
How does an offset account work in Australia?
An offset account is a transaction account linked to your home loan. The balance in the offset account is subtracted from your loan balance before interest is calculated. For example, if you owe $550,000 and have $50,000 in your offset, you only pay interest on $500,000. This reduces interest without formally reducing your loan balance.
Is an offset account worth paying a higher interest rate for?
It depends on your average offset balance. If a lender charges 0.15% extra for an offset product but you maintain $50,000 in the offset on a $550,000 loan, the offset saves approximately $3,150/year in interest while the rate premium costs approximately $825/year — clearly worthwhile. Run the numbers with your actual figures.
Does putting your salary into an offset account help?
Yes. Parking your salary in an offset account — even temporarily before paying bills — reduces the average daily loan balance on which interest is calculated. Over a year, maintaining a higher average offset balance through this approach can save meaningful amounts of interest.
What is the difference between an offset account and a redraw facility?
An offset account is a separate account — funds remain accessible as cash at any time. A redraw facility allows you to make extra repayments directly to the loan and redraw later, but the lender holds the funds and redraw may be restricted. Offsets typically offer more flexibility, though both reduce interest in similar ways while funds are held.
Are offset accounts available on fixed-rate loans?
Most major Australian lenders do not offer full offset accounts on fixed-rate loans, though some provide a partial offset (e.g., up to $10,000–$20,000 offset). Full offset is generally only available on variable-rate home loans. Some split loan products allow you to fix part of the loan while keeping an offset on the variable portion.