Offset Account Calculator
Money sitting in an offset account is subtracted from the loan balance before interest is charged. This shows what that does to total interest and the term, on the balance and rate you enter.
What the calculator is doing
- Each month the calculator charges interest on the loan balance minus the offset balance, never below zero, while the repayment stays at the standard principal-and-interest amount. Because less of each repayment goes to interest, more goes to principal, and the loan finishes early.
- It runs the same loan twice — once with the offset, once without — and reports the difference in total interest and in months. The repayment itself does not change; what changes is how much of it is interest.
- If you add a monthly amount, the offset grows by that much each month. Once it equals the remaining balance, no further interest is charged at all.
Common Questions
Is an offset better than paying extra off the loan?
The interest effect is the same for the same dollar amount. The difference is ownership and access: money in an offset is still your money in your account, while extra repayments have reduced the debt and come back only through redraw. That difference matters most if the property might one day become an investment — it changes how the interest is treated for tax. Our offset-vs-redraw article covers it.
Do offset accounts cost more?
Often the loan product that includes a full offset carries a fee or a slightly different rate than a basic loan. Whether that is worth it depends on how much you would realistically keep in the account. The calculator does not include product fees.
Does the money in offset earn interest?
No — it saves interest instead, at the loan rate. Because that saving is not income, there is no tax on it, which is one reason offset is often more efficient than a savings account paying a similar rate.
General information and indicative estimates only. These calculators do not take your objectives, financial situation or needs into account. They are not credit assistance, credit advice or financial advice, and they are not an offer of credit or an approval.
Any interest rate, buffer, fee or percentage shown is an assumption you can change. It is not a rate or fee offered by Sabea or by any lender. Lenders assess income, expenses and liabilities using their own methods and policies, which differ between lenders and change over time, so an actual borrowing capacity, repayment or cost will differ from these figures.
Tax and transfer duty figures are estimates based on published schedules that are revised each year. Confirm current amounts with the Australian Taxation Office and Revenue NSW, or with your accountant and conveyancer, before relying on them.
Nothing you enter is stored or sent anywhere; the calculations run entirely in your browser. Sabea Financial, Credit Representative 539 662, ABN 86 653 823 253, is authorised under Australian Credit Licence 391237.