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Local Knowledge Finance

Offset vs Extra Repayments Calculator

Compare interest savings from an offset account balance versus making extra repayments each month.

Loan details

Scenarios to compare

Base total interest
$695,029
No offset, no extra
Offset saving
$202,175
With $50,000 parked
Extra repayment saving
$212,713
$500/mo extra
Better option
Extra repayments
Based on total interest saved

Extra repayments saves $10,538 more — but the right choice depends on your goals.

Offset accounts offer flexibility (you can withdraw savings), while extra repayments reduce your balance permanently. A broker can model both against your actual loan features.

Frequently Asked Questions

An offset account is a transaction account linked to your home loan. The balance in the account is offset against your outstanding loan balance when calculating interest. For example, if you owe $500,000 and have $50,000 in your offset, you only pay interest on $450,000.
Extra repayments are additional payments made on top of your minimum required repayment. They go directly toward reducing your principal balance, which means you pay less interest over the life of the loan and can pay off the mortgage sooner. Most variable rate loans allow unlimited extra repayments.
It depends on your circumstances. An offset account offers flexibility since you can withdraw the funds if needed. Extra repayments permanently reduce your loan balance (though some loans have redraw facilities). The interest savings can be similar, but offset accounts often come with higher annual fees.
Variable rate loans generally allow unlimited extra repayments. Fixed rate loans often cap extra repayments at $10,000–$20,000 per year — exceeding the limit may incur break costs. Always check your loan terms or ask your broker before making large lump-sum payments on a fixed loan.

Important Disclaimer

This calculator provides general estimates only. The results are indicative and should not be relied upon as financial advice, a quote, or a guarantee of loan approval or terms.

Your actual borrowing capacity, repayments, stamp duty, and other costs may differ based on:

  • Individual lender assessment criteria and policies
  • Your complete financial circumstances, credit history, and employment status
  • Current interest rates, government policies, and market conditions
  • Property type, location, and intended use (owner-occupied vs. investment)
  • Additional fees, charges, and conditions not captured in this calculator

General Advice Warning

Any information provided by this calculator is general in nature and does not take into account your personal objectives, financial situation, or needs.

Before making any financial decisions, you should:

  • Consider whether the information is appropriate for your circumstances
  • Read the relevant Product Disclosure Statement (PDS) or loan documents
  • Seek professional financial advice tailored to your situation
  • Compare multiple lenders and loan products

Regulatory Compliance: Local Knowledge Finance is committed to compliance with all applicable Australian Securities and Investments Commission (ASIC) regulations and the National Consumer Credit Protection Act 2009.

Not Financial Advice: This calculator and its outputs do not constitute financial advice, credit assistance, or a recommendation to enter into any particular loan or financial product.

Accuracy: While we strive to ensure the accuracy of this calculator, Local Knowledge Finance makes no representations or warranties about the completeness, accuracy, or reliability of the information provided.

Liability: To the maximum extent permitted by law, Local Knowledge Finance disclaims all liability for any loss or damage arising from your use of this calculator or reliance on its results.

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Ding Financial Pty Ltd (trading as Local Knowledge Finance) ACN 110 490 947 is an authorised Credit Representative Number 517980 of Global Mutual Funds Pty Ltd ACN 090 555 436 AFSL/Australian Credit Licence 222640.