What is a redraw offset facility?

A redraw offset facility is linked to your home loan where you can put money (e.g. from savings or your pay) and rather than earn credit interest on that money, you use the money to reduce the interest payable on your home loan. You are able to redraw your money anytime you want, using your Visa Debit card attached to the account.

Offset calculator

Q: How does an offset work?

The amount in your redraw offset facility is offset against your loan balance and interest is only charged on the difference. For example, if your loan amount is $350,000 and you have $50,000 in your offset, then you will only be charged interest on $300,000. Because you pay less in interest, an offset can help you pay off your mortgage sooner while still having the ability to access the money you have in your account.

Q: Is it worth it to have offset?

An offset can be a great way to save thousands of dollars in interest on your home loan. But it's still important to weigh up your individual circumstances to determine if it is right for you. To accumulate significant savings, the amount of money held in the redraw offset facility must be consistently at a reasonable level. To maximise the amount that is offset, many people deposit all their salary into it. They can then spend the money using a linked Visa Debit card, just as they would with a transaction account.

Q: How do you maximise your offset?

Using your offset to reduce the amount of interest you pay on your home loan is like earning high interest that’s tax free. In most cases, your home loan interest rate is going to be higher than your savings account interest rate, so you’re in front when you use your offset. Here are two tips to maximise your offset: Pay your salary directly into your offset Every dollar in offset saves you money every day. So to boost your savings, have your salary paid directly into your offset. Throw in any savings If you're saving for a holiday, new car or even school fees, you can use those savings to help pay off your home loan faster. Deposit them in your offset until you need the money so you will pay less interest.

Calculate how much you could save over time by using an offset sub-account to pay off your home loan faster.

An offset sub-account can help you pay less interest on your home loan and in turn, pay it off faster.

This is because, instead of paying interest on your full loan amount, you’ll only have to pay interest on that part of it which is left after you subtract away what is in the offset sub-account.

Using the home loan offset calculator below is quick and easy.

You can use the offset mortgage calculator to:

See how much sooner you can pay off your loan
Work out how much interest you can save on your loan

Just enter your loan amount, interest rate, starting balance and the net monthly deposit or mortgage repayment you plan to make to your offset sub-account, to find out how much you can save.

If you don't plan on making regular payments into the offset sub-account but have a good idea of what you believe will be the average amount you will keep in it, simply put this amount in the starting balance and leave the net monthly deposit as $0.

Offset FAQs

What is an offset sub-account?

How does an offset work?

Is it worth it to have offset?

How do you maximise your offset?

View FAQs

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