Mortgage Offset Calculator
Estimate how a linked offset balance could reduce mortgage interest and shorten your loan.
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Enter the typical balance you expect to keep in the offset account throughout the loan. It is not a monthly or annual contribution.
How an offset account can reduce mortgage interest
A qualifying 100% offset account reduces the balance on which mortgage interest is calculated. For example, a mortgage of 500,000 with a constant offset balance of 50,000 is charged interest on an illustrative net balance of 450,000. Your regular scheduled repayment remains unchanged, so more goes toward principal and the loan can finish earlier.
This model assumes a fully amortising principal-and-interest mortgage, a fixed offset balance, constant interest rate and unchanged repayment amount. It applies the offset at each scheduled repayment period rather than using actual daily balances. It does not subtract offset savings from principal directly, and it does not include account fees, foregone deposit interest or tax effects.
Country differences: Offset accounts are common in Australia and available with some products elsewhere, but are not standard in every market. Canada uses a semi-annually compounded nominal mortgage rate for illustrative periodic interest. Check that your lender offers a true offset facility and confirm the terms.