Offset Mortgage Calculator
Compare the interest an offset mortgage saves against what the same savings would earn after tax, to see which use of the money wins.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →An offset mortgage sets your savings against the mortgage balance, so you pay interest only on the difference. The savings earn nothing directly, but they avoid interest at the mortgage rate — which is almost always higher than a deposit account pays, and untaxed.
Because the benefit is tax-free in most systems, offsetting frequently wins even where the savings rate looks competitive. The money also stays accessible, which is what separates offsetting from overpaying.
The comparison
Interest avoided = savings held × mortgage rate. Interest earned = savings × savings rate × (1 − tax rate). The advantage of offsetting is the difference, and it is positive whenever the mortgage rate exceeds the after-tax savings rate.
Worked example
With 30,000 offset against a 250,000 mortgage at 6.5%, you avoid 1,950 of interest a year. The same 30,000 in a 3% account taxed at 20% earns 720 after tax. Offsetting is 1,230 a year better, and the benefit is equivalent to a tax-free savings rate of 6.5%.
Access is the real advantage
Unlike an overpayment, offset savings can be withdrawn. That makes an offset account a good home for an emergency fund: it works as hard as an overpayment while remaining available, which is exactly what an emergency fund needs to be.
Turn a calculation into an enquiry
Buyers who run these numbers are ready to talk. Give every listing its own page with your photo, phone and WhatsApp on it — leads land straight on your phone.
Create your free property pageFrequently asked questions
Is an offset mortgage worth a higher rate?
Only if you hold enough savings. Offset products typically price a little above equivalent standard deals, so the interest saved has to cover that premium. Small balances rarely justify it; substantial ones easily do.
Can I withdraw the offset savings?
Yes, which is the main advantage over overpaying. Withdrawing simply increases the balance interest is charged on again, so the money remains genuinely available rather than locked into the property.
Should I offset or overpay?
Offset while you still need access to the money, and overpay once you do not. Offsetting keeps an emergency fund liquid at the mortgage rate; overpaying gives the same return but the money is gone until you refinance or sell.