Home Loan Offset Account Calculator
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Runs entirely in your browser — your numbers never leave this page.
How it works
A home-loan overdraft (SBI MaxGain and its cousins) links a savings/current account to your loan: interest is charged only on loan minus balance. Park ₹5 lakh against a ₹40 lakh loan at 9% and you stop paying interest on that ₹5 lakh — saving ~₹45,000 a year.
That is a tax-free return equal to your loan rate. No FD matches it post-tax: a 7.5% FD nets ~5.2% after 30% tax, while the offset "earns" the full 9%. And unlike prepayment, the money is not gone — withdraw it anytime.
The catch: OD home loans usually charge 0.1–0.3% higher interest and an annual fee. If your surplus is small or erratic, a plain loan plus occasional part-payments wins. This calculator shows your exact breakeven.
Frequently asked questions
How does a home loan overdraft work?
Your loan account is linked to a savings/current account. Each day, interest is charged on (outstanding loan − account balance). Deposit your salary and savings there, and the balance continuously offsets interest.
Is the money locked in?
No — that is the whole point versus prepayment. Withdraw anytime; interest just goes back up on the withdrawn portion. It doubles as your emergency fund earning loan-rate returns.
What is the effective return on parked money?
Exactly your loan interest rate, tax-free. At 9% loan rate, ₹5 lakh parked saves ₹45,000/year — equivalent to a ~12.8% pre-tax FD for a 30% slab taxpayer.
Are there downsides?
Slightly higher interest rate (+0.1–0.3%), annual maintenance fees (₹1,000–3,000), and temptation: easy withdrawals mean undisciplined savers may never build the surplus.
Offset vs prepayment — which is better?
Same interest saving, but offset keeps liquidity. Prepay when you are sure you will not need the money (and your loan has no prepayment penalty); use offset for emergency funds and lumpy income.
Does it reduce my EMI or tenure?
EMI stays the same; the loan amortises faster, cutting tenure. With ₹5L parked on a ₹40L/18-yr loan at 9%, tenure drops by roughly 2.5–3 years.
Is the interest saving taxable?
No — it is reduced interest, not income. Compare with FD interest which is fully taxable; this is a major part of why offset wins.
Can salaried people get these loans?
Yes — SBI MaxGain, IDBI, PNB and others offer them to salaried borrowers. You need to specifically ask; the default sanction is a regular term loan.
What if my surplus fluctuates?
The benefit scales daily with the balance — lumpy is fine, average is what matters. Enter your realistic average surplus above, not the peak.
Does it affect my credit score?
No differently from a regular home loan, as long as EMIs are paid on time. The available drawing power may show as a higher limit — utilisation stays low, which is fine.