A Moneybren tool

NZ OFFSET MORTGAGE CALCULATOR

An offset mortgage points your savings at your home loan in New Zealand — you pay interest only on the difference. This shows the interest saved, the years shaved off, and what your savings are really earning.

Your loan and your offset money

Loan amount $

Floating rate % pa

Offsets in NZ run on floating rates — check your bank’s current floating rate.

Loan term yrs

Money in offset accounts $

Savings, emergency fund, everyday accounts — everything linked.

Added to offset monthly $

Regular savings that stay in the linked accounts.

Your tax rate

Used to show what a term deposit would need to pay to match the offset.

The offset saves you

Without the offset

With the offset

What you still owe

Year-by-year detail

Year	Offset balance	Interest — no offset	Interest — with offset	Balance — no offset	Balance — with offset

How it actually works in New Zealand. Your repayment stays the same, but interest is charged only on the loan minus your linked balances — so more of every payment kills principal, and the loan dies years early. Your offset money stays fully available; it just stops earning bank interest and starts cancelling mortgage interest instead — tax-free, because money you don’t pay isn’t income. Only a few banks offer offsets here — always shop around, and check the floating rate you’ll pay, because offsets run on floating rates which sit well above fixed specials. The offset usually wins for money you need to keep accessible (like an emergency fund); for money you can lock away, compare against fixing more of the loan.

How to use this calculator

Enter your loan, the floating rate, and how much sits in your linked accounts (plus anything you add monthly). The calculator runs the loan with and without the offset and shows the interest saved and the time shaved off.

Then look at the gold card: it converts the offset into an equivalent term deposit rate. That’s the number to remember next time you see a term deposit advertised.

This is a tool only, and none of the information it produces is financial advice. Its accuracy is not guaranteed. Always check your own figures and get advice from your own financial professionals before making decisions.

A worked example

Say you’ve got a $500,000 mortgage and $50,000 sitting in savings.

Link that savings to an offset account, and the bank only charges you interest on the difference – $450,000 instead of $500,000. Your $50,000 isn’t earning interest, but it’s saving you mortgage interest, which (because it’s untaxed and your mortgage rate is higher than any savings rate) is usually the better deal.

And the clever bit: your $50,000 stays fully accessible. Pull it out for an emergency any time – it just goes back to offsetting less. The calculator shows how much interest and time you’d save.

What most people get wrong about offset accounts

The catch nobody mentions: an offset account only works if you actually keep money in it. If your balance is usually near zero, the offset does nothing – and these accounts sometimes come with a slightly higher rate or a fee, so you can end up worse off.

Where offset shines is if you’re a natural saver, or your cash is lumpy – business owners with GST and tax money parked up, people with a chunky emergency fund, anyone who tends to sit on cash. That money can quietly kill mortgage interest while staying available.

It’s often compared to a revolving credit facility, and they scratch a similar itch. The difference is offset keeps your savings and mortgage as separate accounts (which most people find easier to get their head around), while revolving credit smooshes them into one. Either way, the win only shows up if there’s real money doing the offsetting.

This calculator and page are general information only and not financial advice. Everyone’s circumstances will vary – always do your own research and consult your own financial professionals before making decisions.