Offset Account Savings Calculator
A 100% offset account is a transaction account linked to your home loan. The balance in the offset is treated as if it has been paid off the loan when calculating interest, but you can still spend it freely.
Frequently asked questions
Is an offset account better than just paying down the loan?
Mathematically the interest saving is identical (a dollar in offset = a dollar of principal repaid). The advantage is liquidity — you can withdraw from offset instantly, whereas paying down then redrawing requires a redraw approval and (depending on lender) can have a delay or fee.
Does interest saved in an offset account count as taxable income?
No. Because the offset is reducing your loan interest rather than earning interest, the saving is not assessable income. For investors holding an offset against an investment property loan, the trade-off is that having money in offset reduces the deductible interest — paying it as principal has the same effect.