Mortgage & offset calculator
Calculate repayments and the effect of an offset or extra payments.
Example plan · try your own numbers
Your projected balance
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Loan balance & payoff
Save, export & assumptions
Estimates only. Assumes unchanged rates, no withdrawals, tax or fees. Monthly approximation; your bank’s daily calculation and product rules may differ. Calculation details →
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Money in pictures
How does an offset work?
An offset is a bank account linked to a home loan. Money in it can reduce the interest you pay.
This example uses a full offset: all $40,000 counts when the bank works out interest.
1 You owe $600,000.
This is your home loan: money you still need to pay back.
2 Keep $40,000 in the offset.
The bank account is linked to your loan. The $40,000 is still your cash. You have not paid it into the loan.
3 Pay interest on a smaller amount.
The bank subtracts the offset savings when it works out interest. You still owe $600,000.
About this example
A full offset reduces the balance used to calculate interest. It does not pay off the loan. Your cash stays in the separate offset account. Check fees and loan terms; some accounts only provide a partial offset.
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Home loansDoes an offset account reduce what I owe?
Money in a full offset reduces the loan balance used to calculate interest. Your debt remains separate from the offset cash, and spending that cash reduces the interest benefit.
For exampleA hypothetical $500,000 loan with $30,000 in a full offset is charged interest on $470,000. The debt is still $500,000.
Explore a mortgage and offset scenarioHome loansHow is an offset different from extra repayments?
Offset money stays in a separate account linked to the loan. An extra repayment goes into the loan and reduces the debt; getting it back through redraw depends on the lender’s terms.
Read the offset and extra-repayment guideHome loansIs an offset always worth its extra cost?
Compare the interest avoided with any higher loan rate and additional fees. Use the balance you normally keep in the offset, because a high balance on payday can overstate the benefit.
Try the offset cost comparisonHome loansWhat does LVR mean?
Loan-to-value ratio is the loan divided by the property value accepted by the lender, expressed as a percentage. A different valuation or costs added to the loan can change it.
For exampleA hypothetical $480,000 loan divided by a $600,000 lender valuation gives an 80% LVR.
Calculate your deposit and LVRHome loansDoes a deposit or LVR result mean a lender will approve me?
Lenders also check income, expenses, debts and other application details. Howloop’s LVR calculator shows the borrowing share only; it does not approve a loan, quote mortgage insurance or decide scheme eligibility.
Understand LVR and mortgage insuranceNo questions match this search. Try a shorter word, or choose Show all to see every question.
More examples & how the maths works
Your numbers, in real life
Does your offset cover its extra costs?
Compare a $600,000 loan at 6% without an offset with a 6.2% offset loan. Keep an average $40,000 in a full offset and allow $395 in extra annual fees.
First-year illustration · constant balances
- Interest avoided
- $2,480
- Extra costs
- $1,595
- Estimated net saving
- $885
$40,000 × 6.2%.
$1,200 rate premium + $395 fees.
Interest avoided, less both extra costs.
The offset saves interest, but the higher loan rate and fees use up some of that saving.
A starting comparison, not the calculator’s amortising schedule. Balances and rates stay fixed; refinancing costs and alternative savings returns are excluded.
Check your offset break-evenLook beyond the monthly repayment.
Your regular repayment covers interest and reduces the loan principal. An offset can reduce the balance used to calculate interest; an extra repayment directly reduces what you owe. Both can change the total cost and repayment time.
How the calculation works
The base payment uses the standard amortising-loan formula. Each month we calculate interest on the loan balance less the constant offset (never below zero), then subtract your payment and any extra repayment. We compare that schedule with the same loan without either feature.
Common questions
A few good questions.
Does an offset reduce the repayment shown?
The regular repayment is calculated from the original loan, interest rate and term. We hold it fixed so less interest means more principal is repaid. Your lender may apply different repayment rules.
Are fees or interest-only periods included?
No. This models a principal-and-interest loan with a constant rate, monthly payments and a full offset. It excludes lender fees, insurance, rate changes, interest-only periods and tax.
Is the offset money used to pay off the loan?
No. It remains in the separate offset account throughout the model. Repayments continue until the loan balance reaches zero; the offset is not counted as a final lump-sum repayment.