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Home Loan Offset Calculator

Get your guide to your saving potential with Excellence Finance’s home loan offset calculator. This calculator allows you to save the interest on your home loan by offsetting the amount saved in your daily savings account. Hence, this could help you pay less interest and pay off your loan faster.

How We Calculate Your Offset Home Loan?

In order to provide you accurate offset account balance, we use the following data:

  • Loan amount – the amount of money you loaned from a lender or bank
  • Loan Interest Rate – at what rate was your loan charged
  • Loan Term – how long do you have to pay the loan
  • Repayment Frequency – how often you pay you loan per month.

What Is a Home Loan Offset?

An offset home loan is a type of mortgage that allows you to link your savings or transaction account to your home loan account, with the aim of reducing the amount of interest calculated for your home loan repayment. The money in your savings or transaction account is used to offset the balance of your home loan, therefore reducing the interest charged on the loan.

For example, if you have a home loan of $500,000 and you have $50,000 in a linked savings account, the interest on your home loan will be calculated on the balance of $450,000 rather than the full amount of $500,000. This means that you will pay less interest over the life of the loan.

How Can you Utilise Your Offset Account

The utilisation of an offset account in connection to your home loan offers a varity of benefits. For one, it enables you to save interest solely on your home loan. This often results in significantly higher savings than if you were to deposit the funds into a standard savings account or term deposit.

In this day and age, a range of lenders provides the option to use your offset account as a fully transactional account. This implies that you can save interest on your home loan right from the day the funds are placed into the account, such as your salary payment.

Whenever funds are held within your offset account, the equivalent loan balance is overturned,, and interest is not charged. Consequently, every typical repayment made also pays off additional interest, which speeds up the process of paying off your home loan.

However, it is imperative to compare the variance between a home loan that includes an offset account and one that does not, since certain lenders may charge higher interest rates or fees for this feature.

Need Assistance?

If you require assistance in discovering how offset accounts can assist you in saving interest on your home loan, it may be wise to consult a Excellence Finance mortgage broker.

Disclaimer: It is important to note that the calculations do not take into account all fees and charges. Therefore, the results provided by this calculator are an estimate only and should not be the sole basis for making a decision concerning a loan.

Interest rates and other costs can vary over time, ultimately affecting the total cost of the loan. As such, borrowers should consider discussing their unique financial situation with a qualified Australian Credit Licensee or Authorised Credit Representative.

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