Extra repayment and offset calculator

How much extra repayments save

Extra each month	Interest saved	Time saved
$100	$67,163	2 years, 2 months
$250	$145,879	4 years, 10 months
$500	$240,674	8 years, 2 months
$1,000	$359,518	12 years, 6 months

Extra repayments work so well because every extra dollar goes straight to principal. That lowers the balance interest is charged on for every remaining month of the loan. The earlier you start, the bigger the saving.

Extra repayments vs an offset account

An offset account is a transaction or savings account linked to your home loan. Interest is charged on your loan balance minus whatever is in the offset. With $600,000 owing and $50,000 in offset, you pay interest on $550,000.

• Same saving per dollar. $20,000 sitting in offset for the life of the loan saves the same interest as a $20,000 lump sum repayment, about $107,800 in our example.
• Offset keeps your money accessible. You can withdraw it any time without asking the lender, which matters for emergencies or if you later turn the home into an investment property.
• Extra repayments may need redraw. Getting extra repayments back depends on your loan's redraw rules, and some fixed loans cap extra repayments each year.
• Offset loans can cost more. They often come with a package fee or a slightly higher rate. Check that the saving outweighs the cost.

Lump sums

A one-off payment, for example from a tax refund, bonus or inheritance, cuts interest for the rest of the loan. On the example loan, a $20,000 lump sum in the first month saves about $107,800 and 2 years and 9 months. This calculator keeps your repayment the same after a lump sum, so the loan finishes earlier. Some lenders instead lower your repayment, which saves less.

Before you pay extra

• Compare your rate first. If a lower rate is available, the refinance calculator shows whether switching beats paying extra.
• Check whether your loan is fixed. Many fixed-rate loans limit extra repayments (often to $10,000 to $30,000 a year) or charge break costs above that.
• Clear higher-interest debt first, such as credit cards and car loans. Closing unused cards also lifts your borrowing power.
• Keep an emergency buffer, ideally in offset so it still reduces interest.
• If you are thinking about turning the home into a rental later, an offset usually works better than redraw for tax purposes. Speak with a tax adviser.

Frequently asked questions