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Offset Mortgage Calculator: How Much Interest and Time Could You Save?

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 14 June 2026​
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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.

Your Offset Mortgage Calculator is Brought to You by LifeDirect Mortgages

LifeDirect Mortgages, a trusted name in mortgage brokering across New Zealand, proudly supports this guide. We value LifeDirect Mortgages' commitment to helping New Zealanders secure the best home loan solutions, offering personalised advice tailored to your needs.

Whether you're a first-home buyer, looking to refinance, or exploring investment property options, LifeDirect Mortgages' experienced team makes the process simple, transparent, and stress-free. We proudly name them winners of our 2024 Editor's Choice for our favourite nationwide mortgage adviser.

We encourage you to contact their friendly experts to discuss your mortgage needs - you can learn more about LifeDirect Mortgages with our detailed review or visit their website.

Offset Mortgage Calculator

See how much interest you'd save and how many years you'd shave off your mortgage by offsetting your savings against your loan balance.

Total interest saved by offsetting $253,239
Time saved 4 years 5 months
Effective rate 5.76%
Without offsetting
Monthly payment $4,726
Time to pay off 25 years
Total interest $717,935
Total to repay $1,417,935
vs
With offsetting
Monthly payment $4,726
Time to pay off 20.6 years
Total interest $464,696
Total to repay $1,164,696
i
How offsetting works: Your monthly payment stays the same as a standard mortgage, but the bank only charges interest on the loan balance minus your offset savings. More of each payment goes to principal, so the loan is paid off faster. In NZ, only BNZ TotalMoney and Westpac Choices Offset offer true offset mortgages. Both are floating-rate products, so the rate moves with the market.

​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 of 6%, you’ll save $1,200 a year in interest payments ($20,000 X 6%), 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 5% p.a. on the $20,000, you would have earned $1,000 (or around $700 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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