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Yes - if the offset balance stays constant. $50,000 in an offset on a 6.22% loan saves $3,110/year in interest, identical to reducing the principal by $50,000. The difference is that offset funds are accessible, while lump sum reductions require a redraw to access.
Most fixed rate loans cap additional repayments at $10,000–$30,000 per year. Exceeding the cap typically triggers break costs, which can be thousands of dollars. Check your loan contract or ask your lender before making extra payments on a fixed loan.
Offset accounts often come with "package" loans that have annual fees ($300–$400/yr) but lower rates. If you maintain $30,000+ in the offset consistently, the interest savings far exceed the annual fee. Calculate: $30,000 × 6.22% = $1,866/yr saved vs $395/yr fee = net benefit of $1,471/year.
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