Save a lot by paying just a little extra

Enter your loan details into the calculator and the difference between the normal repayments and the amount you can afford to repay into the extra contribution section.

The extra repayment calculator will work out the length of your new mortgage term and the total amount that you will save.

If you need a home loan, please call us on 1300 889 743 or fill in our online enquiry form today.

Why make extra repayments on your mortgage?

Making extra repayments instead of, for instance, putting more into superannuation, is a simple and effective way to minimise the length of your loan and reduce the interest payable. If you refinance to a lower interest rate and then start to make those extra repayments, it can be even more beneficial!

By making higher repayments you reduce the principal on your loan much faster. Even with a small $100 /month additional repayment, this will make a very large difference on the total cost of your mortgage.

Can I make extra repayments to my offset account?

Yes, making additional repayments to a 100% offset account will have the same effect as if you had made the extra repayments to your loan account.

If you are disciplined with your money then it is better to make those extra payments to your offset account. This will enable you to access the funds in the future with greater ease. Of course if you access the funds you have paid into your offset account then you will lose the benefit from making your additional repayments.

To find out more about how an offset account works or to calculate your average offset balance please see our offset account calculator page.

This page will tell you how much you can save by making extra repayments into your offset account.

More mortgage calculators

You can access a range of mortgage calculators on our website which will help you to work out your borrowing capacity and the cost of your mortgage. If you wish to speak to an expert mortgage broker, please call us on 1300 889 743 or enquire online and we can let you know which lenders can approve you.

  • Thomas

    Hi Home Loan Experts, is payment on the offset account more beneficial than saving money? Can someone explain me.

  • Hi Thomas, generally putting money on an offset account is either the same or better than your savings. The account earns no interest, however the bank will take the balance into account when calculating your loan interest.

    Nonetheless, if the interest rate you get on a saving account is higher than your mortgage repayment rate you would be better off with putting money in a savings account or vice-versa.

  • Logue

    Are there any tax benefits to making extra repayments on my mortgage?

  • Hey Logue,

    Making extra home loan repayments has no immediate tax benefit. In addition, any extra repayments that you make can be easily withdrawn again via a redraw facility or an offset account. If you’re not disciplined enough, or your current expenses won’t allow you to, it can easily have you lose the benefit of making extra mortgage repayments.

  • rombeli

    The offset account thing sounds great. Can I have a simple calculation example?

  • Hi rombeli,

    Say you had a home loan of $500k and an offset account with $100k in it. This would mean bank would only charge you interest as if you owed them $400k. Instead of earning $3.5k p.a. on the $100k in a 3.5% savings account, you can save $5k in interest. Also, the ATO would tax you on the $3,500 interest you earn from the savings account you actually end up even further ahead by choosing an offset account. Hope this helps. You can try out your own calculations here:

  • Gary

    I was thinking of buying a duplex but I’m finding out that banks don’t really consider this like a normal residential property. They are being more conservative. Why exactly is that?

  • Duplexes and dual occupancy loans are considered to be a higher risk by most lenders because fewer people want to buy two houses on a single block of land. This means that if you can’t repay your loan the bank will take longer to sell the property or may end up selling for a lower price. Because of this, they tend to limit the percentage of the value of the property that you can borrow (known as the LVR) to protect themselves.

  • Glass

    Why are construction loans usually complicated and even just having them set up is full of errors?

  • Hey Glass,
    The construction process itself is complicated as it involves multiple parties including builders, contractors, lenders, solicitors, accountants, quantity surveyors and the council. Aside from simple miscommunication, there are many other things that can potentially go wrong so it can also be exceedingly complicated to obtain finance. Besides, the majority of mortgage brokers and bank employees don’t truly understand construction as well. This is why construction loans are often set-up with many errors, the loan amount may be incorrect or it may be delayed, due to constant amendments.

  • Ari

    Hi, what is the difference between an offset account and extra repayments to the loan? If i have $100,000 in my offset account and when the loan is finally paid off to zero balance, do I get to keep the $100,000 that is in my offset account?

  • Hi Ari,
    Offset account allows you to park your money, the amount on which you do not have to pay any interest. That means you’ll be able to save the interest on whatever amount you have in offset and also pay off the loan faster. For example, if you have a $200,000 mortgage and you have $100,000 in your offset, you’ll only pay interest on $100,000. Whereas, a home loan with a redraw facility (extra repayments) allows you to borrow/ withdraw money you’ve already repaid and also allows you to use any extra income or savings to reduce the balance of your loan. As for your second question, yes, it is your savings so you’ll get to keep it.