See your repayments, the time and interest your offset saves, and the impact of any extra repayments — with maths you can audit.
Model rate changes — e.g. when a fixed period expires, or RBA rate scenarios.
Every mortgage repayment splits between two things: interest charged on the current balance, and principal that reduces the balance. At the start of a 30-year loan, the balance is at its highest — so the interest portion of each repayment is at its highest too. In the early years, the principal portion of each repayment is small, and most of what you pay goes to the lender as interest.
This is why the first few years of a mortgage feel like the balance barely moves. On a $600,000 loan at 6%, the first monthly repayment is roughly $3,597, but only about $597 of that goes to principal — the other $3,000 is interest. By year 15, principal and interest are roughly balanced. By year 25, almost all of each repayment is principal. It's the same payment every month, but its composition shifts continuously.
The Australian Securities and Investments Commission requires every lender to publish a comparison rate alongside the advertised rate. The comparison rate folds in standard fees and charges, which is why it's usually 0.1–0.3 percentage points higher than the headline. When you're comparing two loans, the comparison rate is the more honest number.
An offset account is a regular transaction account linked to your home loan. The lender calculates interest on your net balance — loan minus offset — every day. If your loan is $500,000 and you have $50,000 sitting in offset, the lender only charges interest on $450,000.
The maths is identical to making a $50,000 extra repayment, but with a critical difference: in offset you keep instant access to the cash. That liquidity matters more than most people realise — extra payments straight onto the loan typically require a redraw process (and some lenders limit redraws or charge fees). Offset gives you the same interest saving without locking the money up.
The compound effect over 30 years is dramatic. A persistent $40,000 offset balance on a $600,000 loan at 6% saves roughly $4,400 in interest per year — but more importantly, it shortens the loan by around 3 years because every dollar of interest saved is one more dollar that goes to principal next month.
The headline figure is your scheduled monthly repayment at the loan amount, rate, and term you've entered. Beneath it, the amortisation breakdown shows how much of each year's repayments goes to interest versus principal, and the projected balance at each year.
The "interest saved" number when you add offset or extra repayments is calculated against the original 30-year baseline. It assumes the offset balance stays consistent — in practice it'll fluctuate, but the calculation is a reasonable approximation if you keep a stable buffer.
The total interest paid over the life of the loan is the figure most people find startling. On a $600,000 loan at 6% over 30 years, total interest is over $695,000 — more than the loan itself. Higher rates or longer terms make this gap dramatically wider. Lower rates, shorter terms, or steady offset balances close it.
This calc covers the principal-and-interest journey on an owner-occupied or investment loan. It does not capture:
Offset or redraw — which is better?
For most owner-occupiers, offset is preferable. The interest-saving maths is identical, but offset gives instant access without a redraw process, and the funds stay technically separate from the loan principal — which preserves tax-deductibility of the original loan if the property later becomes an investment. Redraw moves the funds back into the loan, which can change the tax character of any future borrowing against them.
Does paying weekly instead of monthly really save interest?
Slightly, and the saving comes from a quirk rather than the schedule itself. If you switch from one monthly payment to four weekly payments, you make 52 weekly payments per year instead of 48 (4 × 12) — effectively a bonus four weeks of repayments annually. That extra repayment is what saves interest, not the higher frequency. Setting up weekly with the same total annual amount as monthly saves a few hundred dollars at most over 30 years.
Should I fix my rate, stay variable, or split?
Fixed rates give certainty on repayments for the fixed term, but typically don't allow offset, cap extra repayments, and charge break fees if you need to refinance early. Variable rates give flexibility — offset, unlimited extra repayments, easier refinancing — but expose you to rate movements. A split (part fixed, part variable) hedges both. The right choice depends on your tolerance for repayment uncertainty and how much flexibility you need in the next few years.
For the upfront costs that sit alongside the loan itself, the stamp duty calculator covers state-by-state figures and first-home-buyer concessions. To go deeper on offset accounts and how they interact with refinancing decisions, the offset accounts guide walks through the maths and tax implications. And for the longer-term picture of what the equity built into your home compounds into over decades, the compound calculator models it.