How to use an offset calculator

Calculate how much time and interest you could save on your home loan with a redraw offset facility using our handy offset calculator.
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How does an offset mortgage work?

A redraw offset facility is linked to your home loan. You can put money, potentially including your salary, into the offset. You can also withdraw money when you need it through a card linked to the account.

An offset account or redraw offset facility generally works by offsetting the balance you have in your offset against the money you owe on your home loan. You are only required to pay interest on the difference.

How much can an offset account save you?

An offset can potentially save you a lot of money. For example, imagine you have a loan balance of $400,000 and keep $15,000 in your redraw offset facility. If you have a full 100% offset, like what offer here at loans.com.au, the interest on your mortgage will be calculated on a balance of just $385,000. At a low 2.58% interest rate for instance, you will save $16,775 over the life of the loan and pay off your loan 1 year and 7 months earlier!

Essentially, the amount of money you put in a 100% offset will reduce your loan balance by that amount when interest is calculated. The more money you have in your offset, the more money you will save.

Best of all, you always have full access to any extra money you put into your offset, with no extra fees, which is why many people have their salary paid into their offset and then use it in place of a transaction account for their daily spending.

To find out how much you could potentially save with an offset, check out our handy offset calculator below:

Offset calculator

What is an offset calculator?

Our offset calculator will help you calculate the effect that a redraw offset facility will have on your loan if you put various amounts into the offset. The main effect of an offset will be to help you pay off your loan sooner, as you are charged less interest, so each repayment pays off more of the loan principal. The amount you save will vary according to the size of the loan, the interest rate, and the sum you have in the offset.

How to use an offset calculator

Just like a loan repayment calculator, to use our mortgage offset calculator you must first enter the necessary details. You’ll need to input figures such as your loan amount, interest rate, the term of your loan, repayment frequency such as whether it’s monthly or fortnightly, and your starting offset balance and net monthly offset contribution.

What do I need to enter into the offset mortgage calculator?

TermDescription
Loan amount The loan amount is the sum of money you already own your lender or plan to borrow.
Loan term The loan term is the number of years you have to repay the loan.
Interest rate The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
Repayment frequency The repayment frequency how often you make your repayments. It is usually monthly or fortnightly.
Offset starting balance How much you plan to put into the offset immediately.
Net monthly offset deposit The amount you plan to put in each month, minus the amount you take out.


The result will show you your regular loan repayments, the total mortgage amount, the interest paid, and the interest you can save from your offset account or redraw facility. Our mortgage repayment calculator with offset account included comes in handy when you need to determine whether or not an offset mortgage account will benefit you, given your financial situation.

You can also compare your current mortgage results to one with an offset mortgage account, so you can see the difference when you decide to add the offset feature to your regular loan.

Remember, our calculator will only give an estimate of your home loan repayments and the amount of money you can save from an offset account. For a more exact figure, you can speak to one of our friendly loan specialists. Pre-qualify today using the button below.

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Tags: mortgage offset calculator | offset account

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