Offset Account Impact Calculator
An offset account linked to your mortgage reduces the balance on which interest is charged. $50,000 in offset on a $600,000 loan means you only pay interest on $550,000. See exactly how much you'll save — and how many years earlier you'll pay off your loan.
Loan Details
Offset Account
Savings, salary, emergency fund kept in offset
Net savings deposited monthly (salary minus expenses)
Interest Saved with Offset
Static offset ($50,000)
Loan paid off 5 yrs 1 mos early
Growing offset (+$2,000/mo)
Loan paid off 11 yrs 11 mos early
How offset accounts work for construction loans
During construction, drawdown payments go into your offset. As each progress payment is made, your offset reduces and loan balance increases — but the offset continues to work on the remaining balance. Some lenders allow offset during construction; others only activate it at final drawdown.
Not all construction loans include an offset account. A broker can compare lenders that offer offset + construction in one package.
Offset accounts and construction loans
Not all construction loans include an offset account — it's an important feature to ask about when comparing lenders. Here's how offset interacts with construction:
During construction
At each progress payment stage, funds are drawn from your loan into the builder's account. Some lenders allow you to hold funds in your offset until each drawdown is needed, reducing the interest-only payments during construction. Others structure the facility differently — ask your broker how each lender handles this.
After construction
Once your loan converts to P&I, the offset works identically to a standard home loan — every dollar in the account reduces your effective loan balance. Keep your salary, savings, and emergency fund in the offset for maximum impact.
Fixed vs variable with offset
Offset accounts are not available on fixed-rate loans (or only partially). If you want the flexibility of an offset, choose a variable rate or a split loan (part fixed / part variable with offset on the variable portion).
Related calculators
General advice only. Calculations assume fixed interest rate, consistent monthly offset additions, and principal-and-interest repayments. Actual savings depend on your loan structure, lender policies and offset balance over time.