Daily interest calculation

Australian mortgages calculate interest daily on the outstanding loan balance, then charge it monthly. An offset account reduces the balance used for interest purposes — the funds in your offset account effectively "cancel out" an equal amount of loan balance for interest purposes.

Formula: Daily interest = (Loan balance − Offset balance) × (Annual rate ÷ 365)

How the analyser uses your transaction data

You upload your offset account transaction history as a CSV export from your bank (currently supports ING). The analyser reads each transaction, reconstructs the daily offset balance, then calculates the daily interest saved on your mortgage for each day of each month.

Monthly interest saved = sum of daily interest savings for each day in the month. The cumulative total shows how much less interest you have paid on your mortgage since the offset account was opened.

Rate periods

Mortgage interest rates change over time. Rate periods let you enter the start date, end date, and rate for each period your loan has been at. The repayment amount for each period is also entered so the analyser knows how much principal is being paid.

Key metrics explained

• Interest saved to date: Total interest avoided since your offset account was opened.
• Average daily offset balance: Your average offset balance over the analysis period.
• Monthly interest saving: How much less interest you paid each month vs without an offset account.
• Effective loan rate: Your actual cost of borrowing after the offset benefit is applied.

Worked example

Loan: $600,000 at 6.0% p.a. Offset balance: $80,000 for the full month of January.

• Without offset: $600,000 × 6% ÷ 12 = $3,000 interest
• With $80,000 offset: $520,000 × 6% ÷ 12 = $2,600 interest
• Monthly saving: $400 | Annualised saving: $4,800

CSV format

Export your transaction history from your bank's internet banking as a CSV file. The analyser reads the date, description, debit/credit amount, and running balance columns. For ING, use the "Export" function on your Savings Maximiser statements.

Calculations are based on the transaction data and rate periods you provide. Results are for informational purposes only. Not financial advice.