Calculate your offset
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Home loan comparison
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| Variable | More details | ||||||||||||
| FEATURED | loans.com.au – Variable Home Loan 90 P&I
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loans.com.au – Variable Home Loan 90 P&I
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| Variable | More details | ||||||||||||
HSBC – Home Value Loan - Owner Occupied (LVR 70% to 80%)
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HSBC – Home Value Loan - Owner Occupied (LVR 70% to 80%)
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| Fixed | More details | ||||||||||||
Newcastle Permanent – Fixed Rate Home Loan (1 year)
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Newcastle Permanent – Fixed Rate Home Loan (1 year)
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| Variable | N/A | More details | |||||||||||
Beyond Bank – Purple Basic Variable Home Loan (<80% LVR)
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Beyond Bank – Purple Basic Variable Home Loan (<80% LVR)
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| Variable | More details | ||||||||||||
Athena Home Loans – Straight Up Owner Occupier (Principal & Interest) - Liberate (LVR70%-80%)
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Athena Home Loans – Straight Up Owner Occupier (Principal & Interest) - Liberate (LVR70%-80%)
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| Fixed | More details | ||||||||||||
IMB Bank – IMB Fixed Rate Home Loan (1 year)
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IMB Bank – IMB Fixed Rate Home Loan (1 year)
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| Variable | More details | ||||||||||||
Liberty Financial – Liberty Financial Flexible Home Loan LVR >95% (Owner Occupier)
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Liberty Financial – Liberty Financial Flexible Home Loan LVR >95% (Owner Occupier)
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- No monthly or ongoing fees
- Unlimited free redraw
- No application fee
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of November 21, 2024. View disclaimer.
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Calculator Assumptions: Offset Calculator
Length of Month
All months are assumed to be of equal length. In reality, many home loans accrue on a daily basis leading to a varying number of days' interest dependent on the number of days in the particular month.
Number of Weeks & Fortnights in a Year
One year is assumed to contain exactly 52 weeks or 26 fortnights.
Repayment Amounts
Repayments are rounded to the nearest cent. Repayments are calculated assuming a principal and interest repayment over the loan term. Weekly and fortnightly loan repayment amounts are assumed to be a quarter and a half of the monthly repayment amount respectively.
Interest Rate, Offset Balance, and Net Offset Deposit
The interest rate, starting offset balance, and net offset deposit are considered to be the same for the duration of the loan.
Offset Account
A facility whereby:
The facility operates in conjunction with a loan; Interest is calculated daily and applied monthly in arrears; and The facility has the equivalent interest rate to that of the loan and operates in such a way that the interest payable on the loan is reduced by the amount of the interest that would have been earned on the facility.
Use of the Offset Account
The calculator compares a loan operating without an Offset Account against a loan linked with an Offset Account.
Potential Interest Saved
Calculated as to the sum of A = B less C, where:
A = Potential Interest Saved
B = Interest debited on loans where the loan stands alone.
C = Interest debited on loans where the loan has a linked Offset Account incorporating the offset balance and net offset deposit input by the user.
General
Calculations are estimates and provided for illustrative purposes only. They do not take into account any ongoing fees. The information produced by the calculator is not an indication of nor is it intended to predict future interest rates, future income, or future offset account balance. The calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product and that you should consider obtaining advice from a financial services licensee before making any financial decisions. The calculator utilises information supplied by the user and assumptions made by the calculator to provide a guide only.
What does an Offset Account Mean?
An offset account is an account linked to your home loan mortgage where you can put money, and rather than earn credit interest on that money, use the money to reduce the interest payable on your home loan. Just like a normal saving account, you can still redraw or deposit into an offset account.
The only difference between an offset account and a regular savings account is when you hold money in an offset account over a period of time, it can lower the interest charged on your mortgage rather than earning interest on the money in the offset
How does it work?
Your offset account acts as a transaction account that 'offsets' money to your loan balance. The amount of money in your offset account is deducted from the amount of your home loan, and the interest charged on your home loan will be calculated on this difference.
The higher the balance is and the longer the money is held in the offset account, the less interest you'll be paying - this is one good way of paying off the loan faster.
The most advantageous feature of an offset account is that it can bring down the interest charged on your home loan while still having access to your money anytime you need it.
How much can you save from an Offset Account?
Having an offset account may help you save thousands of dollars and potentially reduce the loan term.
The calculation of your offset savings is done by deducting the amount you have in your offset account from your loan balance, and interest will only be charged on the difference.
For example, you have a loan of $400,000 and you have $50,000 in the offset account, you will only be charged interest on the difference which is $350,000. Since you pay less the interest, this could shorten the length of your loan term and you can pay it off quicker.
Offset Account Calculator FAQs
An offset account can considerably reduce the amount of interest you pay on your mortgage, and your loan term can be reduced. Depending on your loan provider and your repayment type, it may or may not reduce your minimum monthly repayment.
Interest on an offset account is calculated by the difference between your home loan balance and the amount in your attached offset account. For example, if you have a $200,000 mortgage and have $50,000 in your offset account, your loan interest will only be charged on $150,000 instead of $200,000.
This really depends on you and your own financial goals. An offset account allows you to keep your money separate to your loan (ie. in a separate account), and you usually have more flexibility to access your funds. A redraw facility, however, is a facility where your additional funds will usually sit directly in your loan account, and you may not have the same flexibility to access these.
You can maximize the benefit of your offset account by depositing your salary and savings into the account, as well as combining it with credit card payments for online and faster transactions. Offset accounts usually will have a visa debit card attached, meaning you can essentially use your offset account as an everyday account
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of 9 October 2024.
^The addition of offset sub-account means your comparison rate will change.
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