Irish Calculators
Loans & mortgages

Offset Mortgage Payment and Payoff Calculator

Estimate the effect of a constant eligible savings balance on mortgage interest. Use the tool only where your contract permits that offset treatment; it does not identify available mortgage products.

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Your numbers

€
Use the principal owed before the next interest period.
%
Monthly interest is the annual nominal rate divided by 12. This is not a fee-inclusive APR.
Your figures stay on this device.

How the calculation works

Model constant eligible savings that reduce mortgage interest without repaying principal directly. Keep the original payment for earlier payoff, or recalculate a payment that retains the original term.

Monthly interest = max(mortgage balance − eligible savings, 0) × monthly rate. Keep the original payment or solve the payment that clears the balance at the original term.

  1. Calculate the baseline

    First calculate ordinary payment and interest without offset savings. This provides a comparison with the same principal, rate and term.

  2. Reduce interest-bearing debt

    Subtract eligible savings from the mortgage balance each month, with a floor of zero. Apply monthly interest only to the remaining interest-bearing amount.

  3. Apply the strategy

    Retain the baseline scheduled payment until payoff or solve a lower payment across the original term. Limit the actual final payment to the debt and interest still due.

Worked example: Half the principal offset for one month

Sample inputs demonstrate the method. They are not a forecast or product offer.

Without offset, €1,000 over one month at 1% monthly interest requires €1,010. Offsetting €500 reduces interest to €5. The scheduled payment remains €1,010, but the actual final payment is limited to €1,005, saving €5 and clearing the balance.

Loan balance (€)
1000
Annual nominal interest rate (%)
12
Remaining term (months)
1
Constant eligible offset savings
500
Payment strategy
Keep payment and shorten term

Expected result

Interest saved
€5.00
Final balance
€0.00
Worked example: Fully offset, keep original term

Sample inputs demonstrate the method. They are not a forecast or product offer.

Loan balance (€)
1000
Annual nominal interest rate (%)
12
Remaining term (months)
2
Constant eligible offset savings
1000
Payment strategy
Recalculate payment to keep term

Expected result

Offset monthly payment
€500.00
Interest saved
€15.02
Final balance
€0.00

Understanding your result

Savings remain a separate asset. Offsetting interest is different from paying a lump sum off principal, even if the first month's interest reduction can look similar.

Savings above the debt do not create negative mortgage interest. Opportunity costs, interest forgone on savings, account fees and changing savings balances are outside this model.

Questions you might have

Do offset savings pay off the mortgage?

No. The savings remain a separate asset; the model offsets interest while principal is repaid through your payments.

Choosing the right inputs

Constant eligible offset savings
Enter savings eligible for this exact offset treatment. The amount remains constant and is not automatically withdrawn to settle the mortgage.
Payment strategy
Keep-payment mode uses interest savings for faster principal repayment. Keep-term mode solves for a payment that clears the balance at the original end date.
Annual nominal interest rate
Use a nominal annual mortgage rate and a contract permitting this offset calculation. The tool does not establish Irish product availability or eligibility.

Common mistakes to avoid

  • Do not subtract savings from principal and also enter the same amount as an offset.
  • Do not assume the result applies to a contract with different offset eligibility or daily-balance treatment.

Assumptions to check

  • Only use this if your contract permits the stated offset treatment. No Irish product availability is implied.

Sources and method

Read our calculation and testing approach.