Offset Account Calculator Australia 2025 | Mortgage Savings | IntuitiveCalc
Calculate how much interest you could save with a mortgage offset account. See if the package fee is worth it and compare different offset balance scenarios.
How much you add to offset each month
Most offset accounts come with a package fee
Interest Comparison
Offset Account Savings
Interest Saved
$224,664
Over loan life
Time Saved
5y 11m
Paid off earlier
Effective Rate
5.85%
With offset
Net Savings/Year
$7,094
After fees
Without Offset
With Offset
Worth it! Your offset saves $7,489 per year in interest, which is more than the $395 annual fee.
How Offset Accounts Work
Your Loan Balance
$500,000
Offset Balance
- $50,000
Interest Charged On
$450,000
You still make the same repayments, but more goes to principal instead of interest!
Offset Account Benefits
Tax-Free Savings
Interest saved is equivalent to earning tax-free income. At a 30% tax rate, saving 6.5% interest is like earning 9.3% in a savings account.
Full Accessibility
Unlike extra repayments, offset funds remain fully accessible. Withdraw anytime without redraw fees or restrictions.
Investment Property Strategy
For investment loans, offset preserves the deductible debt level while saving interest. Perfect for building savings for your next property.
Pay Off Faster
With more of your repayment going to principal, you pay off your loan years earlier without changing your repayment amount.
Break-Even Analysis
Offset accounts usually come with a package fee ($300-500/year). Here's the minimum balance needed to cover the fee at different interest rates:
| Annual Fee | @ 5.5% | @ 6.0% | @ 6.5% | @ 7.0% |
|---|---|---|---|---|
| $295 | $5,364 | $4,917 | $4,538 | $4,214 |
| $395 | $7,182 | $6,583 | $6,077 | $5,643 |
| $495 | $9,000 | $8,250 | $7,615 | $7,071 |
Minimum offset balance needed to break even on the annual fee
Offset vs Extra Repayments
Offset Account
- + Money stays accessible 24/7
- + Preserves deductible debt (investment)
- + Can use as transaction account
- - Annual package fee applies
- - Higher rate than basic loans
Extra Repayments
- + No fees on basic variable loans
- + May get lower interest rate
- + Psychologically "locked in"
- - Redraw limits may apply
- - Reduces deductible debt (bad for IP)
Maximizing Your Offset
- 1. Salary dump: Have your salary paid directly into the offset account
- 2. Credit card float: Pay expenses on credit card, pay it off at due date from offset
- 3. Emergency fund: Keep your emergency fund in offset instead of savings
- 4. Holiday fund: Park savings for big purchases in offset until needed
- 5. Combine with partner: Both salaries into offset maximizes the balance