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Repayment, interest and principal are different
A principal-and-interest repayment first covers the period’s interest; the remainder reduces the loan. With a fixed rate and payment, the interest component usually falls as the balance falls. An interest-only loan behaves differently and is outside this model.
Offset cash is still cash
A 100% offset reduces the balance used to calculate interest. A $600,000 loan and $30,000 offset accrue this model’s interest on $570,000. At 6% a year divided into months, first-month interest falls from $3,000 to $2,850. The $30,000 does not itself reduce the loan principal.
Keep the comparison fair
The calculator keeps the no-offset scheduled repayment and adds any chosen extra repayment. Lower interest then allows more principal to be repaid. The offset balance is assumed constant for the entire scenario, including when the remaining loan falls below it. It never produces negative interest. It does not assume the loan is repaid as soon as it equals the offset.
Check actual terms
Daily balances, rate changes and repayment rounding affect real loans. Offset facilities can carry fees or a different rate. Redraw and offset are different arrangements, especially where tax and future use of a property are involved. Compare full costs and obtain appropriate advice for tax questions. The existing investment-property calculator remains available for rental cash-flow scenarios.
Try it, then question it
Change one input at a time. Explain why the result moved before changing another. Compare your answer with the worked example and read the exclusions before relying on any estimate.
Model boundaries
Monthly principal-and-interest repayments at a constant annual rate ÷ 12. The base repayment is calculated without offset. Scenario payments keep that repayment and add the extra amount. Interest applies to max(0, loan balance − constant offset). The offset remains separate cash; it does not repay principal. No fees, rate changes, daily lender rounding, redraw, partial offset or interest-only periods. Interest avoided excludes any extra product costs.
References and verification
Official references checked for this release on 1 November 2026. Rules and product terms can change.