1. What is the Offset Mortgage Calculator?

The Offset Mortgage Calculator calculates the interest payable on an offset mortgage by subtracting savings from the loan amount before applying the interest rate. This helps borrowers understand how much they can save by offsetting their mortgage with savings.

2. How Does the Calculator Work?

The calculator uses the offset mortgage formula:

Where:

• \( Loan \) — Total mortgage loan amount ($)
• \( Savings \) — Savings amount to offset ($)
• \( Rate \) — Annual interest rate (%)

Explanation: The formula calculates interest only on the net loan amount after deducting savings, reducing the overall interest payable.

3. Importance of Offset Mortgage Calculation

Details: Accurate offset mortgage calculation helps borrowers maximize savings, plan finances effectively, and understand the benefits of linking savings to mortgage accounts.

4. Using the Calculator

Tips: Enter loan amount in dollars, savings amount in dollars, and interest rate as a percentage. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What is an offset mortgage?
A: An offset mortgage links your savings account to your mortgage, reducing the interest you pay by offsetting your savings against your mortgage balance.

Q2: How much can I save with an offset mortgage?
A: Savings depend on your mortgage balance, savings amount, and interest rate. This calculator helps estimate your interest savings.

Q3: Are there any fees associated with offset mortgages?
A: Some offset mortgages may have higher interest rates or fees compared to standard mortgages. Always check with your lender.

Q4: Can I access my savings with an offset mortgage?
A: Yes, most offset mortgages allow you to access your savings, though reducing savings will increase the interest payable.

Q5: Is an offset mortgage right for me?
A: Offset mortgages are beneficial if you have significant savings and want to reduce mortgage interest while maintaining access to your funds.