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Australia Overpayment & Offset Simulator

See how extra payments and an offset account can reduce your loan balance faster and save you thousands in interest.

Loan Details

$
$100,000$5,000,000
$
$0$750,000
%
0.5%15%
yrs
5 yrs30 yrs

Overpayment & Offset

$
$0$600,000
$
$0$600,000
Australian variable rate loans typically have no early repayment charges. Any extra payments you make go into a redraw facility and can be withdrawn later. An offset account reduces interest on your full balance daily.

Balance Comparison

Over 30 years
No Extra Payments
Extra Payments Only
Extra Payments + Offset

Impact Summary

Interest Saved

$299,852

Combined savings with extra payments + offset

Years Saved (Extra Payments)

11.1 yrs

Years Saved (Offset Only)

1.8 yrs

Years Saved (Both)

11.9 yrs

Payoff Dates

No extra paymentsAugust 2056
With extra paymentsAugust 2044
With offset onlyAugust 2054
With bothAugust 2044

Total Cost

No extra payments$1,226,424
With extra payments$963,329
With offset only$1,151,476
With both$929,261

Monthly Payment

$3,407

PilotRate provides educational mortgage estimates and does not constitute financial advice.

Australia Mortgage Prepayment — Frequently Asked Questions

Can I make extra repayments on my Australian home loan without penalty?
Most variable-rate Australian home loans allow unlimited extra repayments without penalty. Fixed-rate loans typically limit extra payments to $10,000 to $30,000 per year, with excess payments subject to break costs. Our calculator helps you optimize extra payments within your loan type's limits.
What is the difference between an offset account and redraw facility?
An offset account is a transaction account linked to your mortgage that reduces the interest you pay on the balance. Redraw allows you to withdraw extra payments you've made. Offset accounts are generally more flexible since you can access the money anytime like a normal bank account. Redraw may have minimum balance requirements or fees.
How much can I save by making extra home loan repayments in Australia?
Adding $200 per month to repayments on a $500,000 loan at 6% can save over $90,000 in interest and reduce your loan term by approximately 5 years. Using an offset account with $30,000 saved earns the equivalent of 6% interest tax-free. Our simulator shows the exact savings for your loan.
Should I use an offset account or make direct extra repayments?
Offset accounts offer more flexibility since you can withdraw the money anytime, making them ideal for emergency funds and short-term savings. Direct extra repayments typically offer slightly better interest savings since the full payment reduces the principal, but accessing the money requires a redraw facility. Many homeowners use both strategies.
How does making extra repayments affect my tax situation for investment properties?
For investment properties, making extra repayments reduces the loan balance, which reduces the interest you can claim as a tax deduction. Some investors prefer offset accounts for investment properties since the interest deduction remains unchanged while the offset balance reduces interest costs. Consult your tax advisor for your specific situation.