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EnhancedMortgage

Offset SaverOffset mortgage calculator

A fixed loan and an offset loan are run side by side on the same amount and term. The offset loan usually carries a higher rate, but your savings reduce the balance that is charged interest, and what you add each month keeps growing them. The calculator shows the interest saved, the months saved and the effective rate of each.

Live comparison

Fixed vs offset mortgage

See how an offset savings account can beat a lower fixed rate and pay the loan off early.

Loan

Per year, standard mortgage
Per year, offset mortgage

Offset account

Added to the offset each month

Description

Compares a standard fixed mortgage with an offset mortgage to estimate how growing offset savings could reduce interest and shorten the repayment term.

Assumptions

  • Both options use the same loan amount and term, monthly principal-and-interest repayments, and constant annual rates.
  • Monthly rates equal the annual rate divided by 12. Repayments stay level, except for the final payment needed to clear the balance.
  • Offset interest uses the full loan balance in month 1. Later months use the previous loan balance less the offset balance, with the interest-bearing balance never below zero.
  • The offset opens with savings plus the first monthly contribution, then grows by that contribution until near payoff. Withdrawals and interest earned on savings are excluded.
  • Fees, taxes, rate changes, and extra loan repayments are excluded.

Whole-of-term comparison

The offset option could save you in interest

$76,240

and clear the loan 15 months early - repaid in 8 years 9 months instead of 10 years.

Effective interest rate

Fixed mortgage

5.07%

4.99% advertised

Offset mortgage

3.52%

6.14% advertised

Interest on the offset loan is only charged on the balance minus your savings, so the 6.14% loan effectively costs just 3.52% a year.

Fixed mortgage

4.99% p.a.

Monthly
$7,421
Total interest
$190,540
Total paid
$890,540
Paid off in
10 years

Offset mortgage

6.14% p.a.

Monthly
$7,821
Total interest
$114,299
Total paid
$814,299
Paid off in
8 years 9 months

The offset mortgage carries a higher rate but links a savings account ($170,000 opening + $500/month) that reduces the interest-bearing balance, so more of each payment clears principal. Estimate only.

Interest paid over time

How much interest each option costs across the first years and the whole term.

PeriodFixed4.99% p.a.Offset6.14% p.a.You saveOffset vs fixed
1 year$33,675$31,535$2,140
2 years$64,050$56,240$7,810
3 years$91,671$77,496$14,175
Whole term$190,540$114,299$76,240

Offset schedule

Each month of the offset loan: your payment, where it goes, and your savings against what you owe.

Paid off in month 105
MonthPaymentInterestPrincipalOffset balanceLoan balance
1$7,821$3,582$4,239$170,500$695,761
2$7,821$2,688$5,133$171,000$690,628
3$7,821$2,659$5,162$171,500$685,466
4$7,821$2,630$5,191$172,000$680,275
5$7,821$2,601$5,220$172,500$675,055
6$7,821$2,571$5,249$173,000$669,805
7$7,821$2,542$5,279$173,500$664,527
8$7,821$2,512$5,308$174,000$659,218
9$7,821$2,483$5,338$174,500$653,880
10$7,821$2,453$5,368$175,000$648,512
11$7,821$2,423$5,398$175,500$643,114
12$7,821$2,393$5,428$176,000$637,686
13$7,821$2,362$5,458$176,500$632,228
14$7,821$2,332$5,489$177,000$626,739
15$7,821$2,301$5,520$177,500$621,219
16$7,821$2,270$5,550$178,000$615,669
17$7,821$2,239$5,581$178,500$610,088
18$7,821$2,208$5,612$179,000$604,475
19$7,821$2,177$5,644$179,500$598,832
20$7,821$2,146$5,675$180,000$593,156
21$7,821$2,114$5,707$180,500$587,450
22$7,821$2,082$5,739$181,000$581,711
23$7,821$2,050$5,770$181,500$575,941
24$7,821$2,018$5,803$182,000$570,138
25$7,821$1,986$5,835$182,500$564,303
26$7,821$1,954$5,867$183,000$558,436
27$7,821$1,921$5,900$183,500$552,536
28$7,821$1,888$5,933$184,000$546,604
29$7,821$1,855$5,965$184,500$540,639
30$7,821$1,822$5,999$185,000$534,640
31$7,821$1,789$6,032$185,500$528,608
32$7,821$1,756$6,065$186,000$522,543
33$7,821$1,722$6,099$186,500$516,444
34$7,821$1,688$6,133$187,000$510,312
35$7,821$1,654$6,166$187,500$504,145
36$7,821$1,620$6,201$188,000$497,945
37$7,821$1,586$6,235$188,500$491,710
38$7,821$1,551$6,269$189,000$485,441
39$7,821$1,517$6,304$189,500$479,137
40$7,821$1,482$6,339$190,000$472,798
41$7,821$1,447$6,374$190,500$466,424
42$7,821$1,412$6,409$191,000$460,015
43$7,821$1,376$6,444$191,500$453,571
44$7,821$1,341$6,480$192,000$447,091
45$7,821$1,305$6,516$192,500$440,576
46$7,821$1,269$6,551$193,000$434,024
47$7,821$1,233$6,588$193,500$427,437
48$7,821$1,197$6,624$194,000$420,813
49$7,821$1,161$6,660$194,500$414,153
50$7,821$1,124$6,697$195,000$407,456
51$7,821$1,087$6,734$195,500$400,722
52$7,821$1,050$6,771$196,000$393,952
53$7,821$1,013$6,808$196,500$387,144
54$7,821$975$6,845$197,000$380,298
55$7,821$938$6,883$197,500$373,415
56$7,821$900$6,921$198,000$366,495
57$7,821$862$6,959$198,500$359,536
58$7,821$824$6,997$199,000$352,539
59$7,821$786$7,035$199,500$345,504
60$7,821$747$7,074$200,000$338,431
61$7,821$708$7,112$200,500$331,318
62$7,821$669$7,151$201,000$324,167
63$7,821$630$7,191$201,500$316,976
64$7,821$591$7,230$202,000$309,746
65$7,821$551$7,269$202,500$302,477
66$7,821$512$7,309$203,000$295,168
67$7,821$472$7,349$203,500$287,819
68$7,821$431$7,389$204,000$280,429
69$7,821$391$7,430$204,500$273,000
70$7,821$350$7,470$205,000$265,529
71$7,821$310$7,511$205,500$258,018
72$7,821$269$7,552$206,000$250,466
73$7,821$228$7,593$206,500$242,873
74$7,821$186$7,635$207,000$235,239
75$7,821$144$7,676$207,500$227,562
76$7,821$103$7,718$208,000$219,844
77$7,821$61$7,760$208,500$212,084
78$7,821$18$7,802$208,500$204,282
79$7,821$0$7,821$208,500$196,461
80$7,821$0$7,821$208,500$188,640
81$7,821$0$7,821$208,500$180,819
82$7,821$0$7,821$208,500$172,999
83$7,821$0$7,821$208,500$165,178
84$7,821$0$7,821$208,500$157,357
85$7,821$0$7,821$208,500$149,536
86$7,821$0$7,821$208,500$141,716
87$7,821$0$7,821$208,500$133,895
88$7,821$0$7,821$208,500$126,074
89$7,821$0$7,821$208,500$118,253
90$7,821$0$7,821$208,500$110,433
91$7,821$0$7,821$208,500$102,612
92$7,821$0$7,821$208,500$94,791
93$7,821$0$7,821$208,500$86,971
94$7,821$0$7,821$208,500$79,150
95$7,821$0$7,821$208,500$71,329
96$7,821$0$7,821$208,500$63,508
97$7,821$0$7,821$208,500$55,688
98$7,821$0$7,821$208,500$47,867
99$7,821$0$7,821$208,500$40,046
100$7,821$0$7,821$208,500$32,225
101$7,821$0$7,821$208,500$24,405
102$7,821$0$7,821$208,500$16,584
103$7,821$0$7,821$208,500$8,763
104$7,821$0$7,821$208,500$942
105$942$0$942$208,500Paid off

Loan balance over time

The offset mortgage reaches zero earlier despite the higher rate.

Fixed vs offset balance

Both start at the loan amount; the offset loan is paid off first.

Fixed - 4.99%Offset - 6.14%
$0$200K$400K$600K$800K202620282030203220342036

Offset Saver: how it works

What this calculator shows you

Offset Saver showing $76,240
  • Interest saved and months saved
  • Effective interest rate of each loan
  • A chart of the loan balance, with the interest over time in a table
  • Full monthly schedule with the offset balance

How to use it

  1. Enter the loan amount and term.
  2. Enter the fixed rate and the offset (floating) rate.
  3. Enter your savings and what you add each month.
  4. Compare both loans.

Why use it

For your clients

  • Explains offset in pictures, not jargon.

For your business

  • Helps clients see when an offset is, and is not, worth it.

How it works

  • The fixed loan is a standard monthly table loan at its rate.
  • The offset loan charges interest on the loan balance less the offset balance, which grows by your monthly contribution; once savings exceed the loan, interest stops and payments are pure principal, so the loan clears early.
  • Rates stay the same for the whole term, and there are no fees.
  • The two- and three-year comparison windows start from the second month, as in the model the calculator was built from.

Worked example: A $500,000 loan over 30 years, fixed at 5.99% against an offset loan at 6.49% with $20,000 of savings and $500 added a month: the offset loan clears in 273 months, 87 months sooner, and saves $218,686 of interest.

Common questions

Do I earn interest on offset savings?
No. Instead, you are charged less interest on the loan, which is usually worth more and is not taxed.
Is the offset rate higher?
Usually offset accounts sit on a floating rate, which can be higher than fixed rates.

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This calculator provides illustrative estimates based on your inputs and the stated assumptions. It is not financial advice. Consider consulting a qualified financial or mortgage adviser about your circumstances.

Last updated 6 October 2026