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Offset Mortgage Calculator

Our Offset Mortgage Calculator shows whether or not an offset mortgage is better or worse for you in terms of the monthly mortgage payment amount and the total interest payable over the life of the mortgage.
Updated 7 October 2024
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​An offset mortgage links your mortgage to your everyday cash savings account. The total sum of your savings is deducted from your mortgage balance, which reduces your monthly interest costs and repayments. In a nutshell, you won't won't pay interest on the mortgage debt that is 'offset' by the equivalent amount of savings.

This calculator shows whether or not an offset mortgage is better or worse for you in terms of the monthly mortgage payment amount and the total interest payable over the life of the mortgage.

Important: The calculator below is computer-led and relies on certain assumptions. Its purpose is to give a general estimate of costs and savings from an offset mortgage. It is not financial advice, nor should it be relied on to make any financial decision. Always obtain a specific quote from a lender, and triple-check the information, before agreeing to any mortgage.
Offset Mortgage calculator
Mortgage amount ($30,000 - $2,000,000)
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Please enter a mortgage amount between $30,000 and $2,000,000.
Mortgage term (2 - 25 years)
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Please enter a mortgage term between 2 and 25 years.
Interest rate (0.25% - 15%)
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Please enter an interest rate between 0.25% and 15%.
Total savings balance ($0 - $2,000,000)
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Please enter a savings balance less than or equal to your mortgage amount.
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What could you save by Offsetting
Offsetting
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could save you
$0
per month
which is
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over the term of your mortgage.
The benefits of Offsetting
Offsetting Without Offsetting
Offsetting monthly payment$0Without Offsetting monthly payment$0
Offsetting total interest payable$0Without Offsetting total interest payable$0

​How offset mortgages work

  • An offset mortgage doesn’t affect the value of your savings. Instead, your savings are deposited with the bank, and their value is ‘offset’ against your mortgage balance.
  • For example, if you have a $500,000 mortgage and $20,000 in cash savings, you’ll only pay interest on $480,000. You won’t earn in interest on the cash savings as you usually would while it’s part of the offset mortgage.
  • With a mortgage interest rate if 3%, you’ll save $600 a year in interest payments ($20,000 X 3%), which makes your mortgage ‘cheaper’.
  • However, you won’t earn any interest on your savings balance, so this needs to be factored in to calculate the actual saving.
  • For example, if you expected to earn 2% p.a. on the $20,000, you would have earned $400 (or around $300 after-tax).
  • The likely saving from using an offset mortgage in this example is around $200 per year. However, the mortgage market is competitive, and interest rates can be a lot lower.
  • Fees may also apply – some offset mortgages charge $10/month, so this needs to be factored in. As a point of comparison, standard home loans rarely charge monthly fees.
  • Offset mortgages have a few unique features you need to know about - our Offset Mortgage Guide explains these in detail.
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