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| Metric | Without Offset | With Offset | Savings/Difference |
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An offset account is a savings account linked to your home loan that reduces the interest you pay.
The balance in your offset account is "offset" against your loan balance, meaning you only pay interest on the difference.
A 100% offset account is the most effective. If you have $50k in the offset against a $400k loan, you only pay interest on $350k.
Important Disclaimer & Assumptions
Assumptions: Assumes the offset balance remains constant throughout the loan term. In practice, offset balances fluctuate with income and expenses. Interest savings are calculated on the net loan balance (loan minus offset). Results assume a variable rate loan.
General Disclaimer: This calculator is provided by Mortgage & Finance Advisory (Credit Representative 575841 of Connective Credit Services Pty Ltd, Australian Credit Licence 389328) for illustrative and educational purposes only. Results are estimates based on the information you provide and the assumptions listed above. They do not constitute financial advice, a loan offer, or a guarantee of any outcome.
Actual loan terms, interest rates, fees, government charges, and eligibility criteria will vary between lenders and depend on your individual circumstances. Interest rates used are for comparison purposes only and may not reflect current market rates.
We recommend seeking independent financial, legal, and tax advice before making any financial decisions. For personalised advice tailored to your situation, please book a free strategy call with our team.
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An offset account is a transaction account linked to your home loan. The balance in your offset account is deducted from your loan balance when calculating interest. For example, with a $500,000 loan and $50,000 in offset, you only pay interest on $450,000.
An offset account is generally worth it if you maintain a reasonable balance. The interest savings are tax-free and at your mortgage rate, which often exceeds after-tax returns on savings accounts. Even $20,000 in offset can save thousands over the loan life.
An offset account is a separate transaction account that reduces interest on your loan. Redraw allows you to access extra repayments you've made. Key differences: offset funds are instantly accessible and don't affect your loan balance, while redraw policies vary by lender.
