Free Calculator
Offset Account Calculator
An offset account reduces the interest charged on your home loan by offsetting your savings balance against the loan principal. Estimate the interest saving and time you could shave off your loan.
Calculators are provided by VisionAbacus through the MFAA. Results are estimates only, are based on the accuracy of the information entered, and don’t constitute a quote or loan approval.
How To Use It
Using the offset account calculator
- Enter your loan balance, interest rate and remaining term.
- Enter the average balance you expect to keep in the offset account, including your salary if it is paid in.
- Compare the interest saved against any package or account fees the offset product charges.
FAQ
Offset Account calculator questions
How does an offset account reduce interest?
An offset account is a transaction account linked to your home loan. Its balance is subtracted from the loan balance before interest is calculated each day. With a $600,000 loan and $40,000 in a full offset account, you pay interest on $560,000. Your required repayment usually stays the same, so more of each repayment goes to principal and the loan is paid off sooner.
Is an offset account worth the extra fees?
It depends on how much you keep in it. An offset account often comes with a package or monthly fee, or a slightly higher rate. If your average balance is small, the interest saved may not cover the cost. This calculator shows the saving for your balance, which you can weigh against the fee before choosing a loan.
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