Wondering how much interest cost you can save on your home loan? This mortgage offset calculator tool can provide an accurate estimate of the impact that using your offset account will have on your mortgage repayments and the interest you could save over the life of your loan.
To begin, enter your loan details and offset account balance into our calculator. Once you have entered the information correctly, the calculator will display a comparison of the loan balance with and without the use of your offset account. This difference represents the interest you could save in the particular scenario.
Adjust the variables on the calculator to test different offset account balances and ongoing deposit amounts. Using your offset account may not always be beneficial, and our mortgage offset calculator can help you chart a path towards your desired financial outcome. Try our mortgage offset calculator today and see how much you could save.
How using your offset account reduces the interest you pay
An offset account is a savings account that is linked to your home loan. Any money deposited into the account will offset the mortgage repayments, reducing the loan amount that interested is calculated from.
For instance, if you have a $500,000 mortgage linked to an offset account with $50,000, interest is charged only on the offset balance of $450,000.
As a general rule, the more money in the offset account, the lower the interest charged over the course of the home loan.
Use a mortgage offset calculator before making a decision
Using an offset account does not always result in the best financial outcome, as there is an opportunity cost involved. Funds in an offset account generally do not earn interest and are unavailable for use.
Having an estimate of potential interest savings from an offset account provides a clear picture of how your finances may be affected and whether using an offset account is the best decision.
What does it mean to have a 100% offset account?
A 100% offset account simply means that the full amount of funds is applied when calculating the offset for the mortgage.
Not all financial institutions offer 100% offset accounts for a home loan; some offer lower percentages, such as 80%, where only 80% of the total funds are used to offset the mortgage.
Can you withdraw from an offset account?
Yes. Most offset accounts allow you to take money out, just like a savings account. However, doing this reduces the home loan’s offset amount for the current repayment period, which results in lower interest savings.