Offset Account Calculator
Open Investment Tools → Mortgage & Borrowing, then choose Offset Account Calculator.
What it helps you answer
An offset account reduces the mortgage balance on which interest is calculated by the amount held in
linked savings. Use this calculator to estimate whether that arrangement could reduce interest and the
time needed to repay the loan.
Enter:
- the loan amount, annual interest rate, remaining term, and repayment frequency
- the starting balance held in offset accounts
- either a regular monthly contribution, or monthly income and expenses so Swish can estimate the
amount left after the scheduled mortgage repayment
How the calculation works
Swish first models a standard principal-and-interest loan. It then models the same loan while charging
interest only on the loan balance not covered by the offset balance. Contributions or the calculated
monthly surplus increase the offset balance throughout the projection. The scheduled mortgage
repayment stays the same, so lower interest allows more of each payment to reduce the loan.
The model assumes the starting balance and contributions remain available for the full projection. If
monthly income does not cover expenses and the estimated mortgage repayment, the income-and-expenses
scenario is treated as unaffordable and no result is shown.
What the results show
After you select Calculate, review:
- estimated interest saved and time saved compared with the standard loan
- scheduled repayment and estimated time until mortgage-free
- total interest and total repaid with and without offset
- the current effective balance and immediate interest reduction
- a chart comparing the standard and offset loan balances over time
What to compare
Compare the estimated saving with any account fees, a different interest rate, and the balance you can
realistically keep in offset. Money that regularly leaves the offset account will reduce the benefit.
The calculation does not model changing income, expenses, and savings.
Results are indicative and do not represent a lender offer. See
Contacting an adviser.