NZ Revolving Credit vs Offset Mortgage Calculator
Calculate tax-free daily interest savings, equivalent pre-tax yield, and wealth acceleration using New Zealand floating Offset Mortgages and Revolving Credit facilities.
Calculate tax-free daily interest savings, equivalent pre-tax yield, and wealth acceleration using New Zealand floating Offset Mortgages and Revolving Credit facilities.
Calculate tax-free daily interest savings, equivalent pre-tax yield, and wealth acceleration using New Zealand floating Offset Mortgages and Revolving Credit facilities. Calculate exact, penny-accurate projections compliant with 2026 Inland Revenue (IRD) • ACC • Reserve Bank of New Zealand (RBNZ) standards using Calconova's deterministic IEEE-754 (Decimal.js) calculation engine with instant breakdowns.
$271.88 / month cash kept
%33 marginal tax bracket equivalent
%5.00 vs term deposit rate
Shielded from floating interest
Configure floating facility parameters and available cash.
Compounding effect of tax-free mortgage interest avoided.
Bank term deposits erode after 33% RWT, yielding only 3.35% net. Avoiding a 7.25% mortgage rate creates a guaranteed, completely risk-free pre-tax equivalent return of 10.82% p.a.
\text{Annual Mortgage Interest Saved} = \text{Effective Offset Cash} \times r_{\text{floating}} \\
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\text{Taxable Savings Return (Net)} = \text{Cash} \times r_{\text{savings}} \times (1 - \text{RWT}) \\
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\text{Pre-Tax Equivalent Yield} = \frac{r_{\text{floating}}}{1 - \text{Marginal Tax Rate}}In New Zealand, earnings in bank savings accounts are heavily penalized by Resident Withholding Tax (up to 39%). Under an Offset Mortgage or Revolving Credit facility, every dollar of linked cash reduces the principal upon which daily floating interest is calculated. Because mortgage interest savings are 100% tax-free, the effective pre-tax yield matches high-double-digit guaranteed returns.
All calculations, amortizations, and scenario projections displayed on this page are strictly for informational and educational purposes. Nothing herein constitutes investment, financial, tax, or legal advice. Actual Reserve Bank of New Zealand (RBNZ) interest rates, IRD PAYE brackets, ACC Earner's Levy, KiwiSaver regulations, and lender criteria may vary. Calconova explicitly disclaims all liability for any decisions taken based upon these calculations. Consult a qualified financial advisor, CPA, or official Inland Revenue documentation prior to executing financial commitments.
An Offset Mortgage allows you to keep multiple distinct accounts (everyday checking, emergency fund, tax savings) separated while pooling their balances to offset your loan. A Revolving Credit facility is a single giant overdraft account where all income is dumped directly into the mortgage balance and expenses are drawn down as needed.
No. Your savings remain 100% liquid and accessible at any moment. You can transfer money, pay bills, or make EFTPOS purchases as normal. On the days funds are withdrawn, interest is simply charged on the un-offset portion of the loan.
First, mortgage floating interest rates (e.g. 7.25%) are higher than deposit rates (e.g. 5.00%). Second, interest earned in term deposits is eroded by RWT tax (up to 39%), while mortgage interest avoided is 100% tax-free. Saving 7.25% tax-free beats earning 5.00% gross every single time.
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