Loan Ledger — offset & extra-repayment planning
| Rate | Monthly | Total Interest | Cleardate | vs Now |
|---|---|---|---|---|
| 4.10% | $1,463 | $14,079 | 2043 | saves $3,802 |
| 4.60% | $1,543 | $15,183 | 2042 | saves $2,699 |
| 5.10% | $1,624 | $16,179 | 2042 | saves $1,703 |
| 5.60% | $1,708 | $17,075 | 2041 | saves $806 |
| 6.10% | $1,794 | $17,881 | 2040 | — |
| 6.60% | $1,882 | $18,604 | 2040 | costs $723 |
| 7.10% | $1,971 | $19,254 | 2039 | costs $1,373 |
| 7.60% | $2,063 | $19,834 | 2039 | costs $1,952 |
| 8.10% | $2,156 | $20,354 | 2038 | costs $2,472 |
Step 1: Enter your current loan balance, interest rate, and loan term end date — exactly as shown in your banking app.
Step 2: Add your offset balance (reduces interest daily) and optional extra monthly repayments to see the payoff impact.
Step 3: Review the charts and tables. The year-by-year breakdown shows principal vs. interest paid. The rate sensitivity table shows what happens if rates rise or fall.
Tip: Test different extra payments or offset amounts to see which strategy saves you the most interest and shortens your loan term.
The offset balance reduces the interest you're charged each day. A $100k offset on a $500k mortgage saves roughly half a percentage point of annual interest.
Change the interest rate field to see new repayment and interest costs. Use the Rate Sensitivity table to explore multiple scenarios at once.
Even $500/month extra can shorten a 25-year mortgage by 3–5 years and save tens of thousands in interest.
Enter your loan balance, interest rate, remaining term and any offset balance or extra repayments. The calculator projects your repayment schedule, total interest and payoff date, then shows how an offset balance or extra monthly payments shorten the loan and cut the interest you pay. Change any input to compare scenarios side by side.
Enter your current loan balance (from your banking app), interest rate, and loan end date. The calculator instantly shows your total remaining interest, your monthly repayment, and — most importantly — how much you can save by making changes.
Add your offset balance to see the real cost of your loan. Add extra monthly repayments to see how much time and interest you eliminate. The rate sensitivity table shows how a 0.5% rate change affects your total interest bill.
Most Australians with a home loan face this choice: should surplus cash go into the offset account or as extra repayments? The answer depends on whether you might ever rent the property.
Your mortgage affects your financial independence date in two ways. First, it inflates your monthly expenses — every dollar of mandatory repayment is a dollar you need your portfolio to cover. Second, the property is an illiquid asset that doesn't generate income until sold or rented.
The fastest path to work flexibility often combines paying down the mortgage faster (reducing required expenses) with building an accessible investment portfolio (the "bridge" before super preservation age). Once the mortgage is gone, your FIRE number can drop by $750k–$1.2M depending on your property value and location.
Use the FIRE calculator to model what happens to your independence date when mortgage expenses drop to zero.
It shows your total interest cost, monthly repayment, and remaining balance at any point during the loan. More usefully, it shows how much interest you can eliminate by using an offset account, making extra repayments, or refinancing to a lower rate.
An offset account is a savings account linked to your mortgage. The bank charges interest only on your loan balance minus your offset balance. With $400k loan and $80k in offset, you pay interest on $320k. Unlike extra repayments, the money stays accessible — it's liquid savings that also cuts your interest bill.
Offset is usually better if you have or plan to convert your home to an investment property — extra repayments reduce your loan balance permanently, which reduces future tax-deductible interest. An offset leaves the loan intact while achieving the same interest saving. If you never plan to rent the property, extra repayments are slightly simpler.
On a $600k loan at 6.5% over 25 years, paying an extra $500/month saves roughly $130,000 in interest and cuts the loan by about 7 years. The savings compound heavily — every dollar you repay early avoids years of future interest on that dollar.
Interest-only repayments pay the bank's charge without reducing your debt. After the interest-only period ends, repayments jump because you must repay the original balance over a shorter remaining term. P&I repayments build equity from day one. Interest-only is typically used by investors who want to maximise tax deductions and cash flow.
Refinancing makes sense when the interest saving over your remaining term exceeds the discharge, application, and legal fees (usually $1,500–$3,500). A rough rule: if you can drop 0.5% or more on a balance above $300k with more than 10 years remaining, the numbers usually work. Always calculate the break-even — how many months until the saving covers the cost.
Loan-to-Value Ratio is your loan balance divided by the property value. Banks use it to set interest rates — borrowers below 80% LVR typically access better rates and avoid Lender's Mortgage Insurance (LMI). As your balance falls and the property value rises, your LVR improves. At 60% LVR you typically access the lowest rate tier.
It depends on your mortgage rate versus expected investment returns. If your rate is 6.5% and you expect ETF returns of 8–9%, investing extra cash may compound faster. But paying the mortgage is a guaranteed, risk-free return equal to your rate. Most FIRE-focused Australians balance both: maintain the offset at a meaningful level while continuing to invest.
A split loan divides your mortgage into two portions — typically one fixed-rate and one variable-rate. The fixed portion gives payment certainty; the variable portion can usually accept extra repayments and is linked to the offset account. Common split: 60-70% fixed, 30-40% variable with offset.
A paid-off mortgage dramatically reduces your monthly expenses — often by $2,500–$4,000/month. That reduction directly lowers your FIRE number (the portfolio you need to be financially independent). Many Australians find that once the mortgage disappears, they could afford to work part-time immediately — without waiting to hit full FIRE.
Your offset balance is returned to you at settlement — it's your money, not equity in the property. When refinancing, the offset account typically needs to be opened fresh with the new lender, but the funds transfer easily. Check whether your new loan product includes an offset account before refinancing.
Lenders assess your gross income, existing debts, living expenses (using benchmarks like HEM), and a buffer rate — typically your actual rate plus 3%. They lend up to the point where repayments at the buffered rate don't exceed roughly 30-35% of gross income. Higher existing debt (like a car loan) directly reduces how much mortgage you can access.
I'm a geologist-turned-builder who got frustrated with financial calculators that hand-wave how Australian tax actually works.
Every projection on MyNextDollar runs on current ATO mechanics for FY2026-27 — Stage-3 brackets, super contribution caps and HELP thresholds.
The calculation engine is covered by 88 unit tests and 10,000 fuzz scenarios, so what you see is exactly what the rules produce — not a rough estimate.