Offset vs Extra Repayment Calculator: Methodology
The calculator compares interest on the mortgage balance with interest on the balance net of offset cash, then deducts entered offset/package costs.
Calculation approach
The base path amortises the entered loan using its calculated original scheduled repayment. Offset interest is calculated on the remaining debt less constant offset cash, floored at zero; the extra-payment path starts with principal reduced by the same cash and keeps the original scheduled repayment.
The premium is a simple estimate: original loan balance multiplied by the entered annual rate premium and entered horizon. Annual offset fees are also multiplied by the entered horizon. The amortisation comparison is capped at the entered loan term, but fee and premium estimates use the full entered horizon; set a horizon no longer than the loan term for a consistent comparison.
- It assumes the entered cash remains in offset for the chosen horizon.
- The extra-repayment comparison applies the same cash to principal.
- Tax and redraw consequences are outside the calculation.
What the calculator deliberately does not decide
The calculator does not select a lender, predict approval, expose lender policy or provide personal financial or tax advice. It is a transparent comparison tool so you can test structure before seeking a quote.
Use the enquiry form for an initial broker review. No lender application is made just by enquiring.
Review my home loan optionsSources and verification
- Moneysmart — Switching home loans
- Moneysmart — Mortgage offset accounts
- APRA — Macroprudential policy settings
General information only. It is not personal financial, tax or legal advice. Finance approval, pricing and structure are subject to lender assessment and your circumstances.