How mortgage interest works

A home loan repayment covers interest first, then principal. Early in a 30-year loan most of each repayment is interest because the balance is still large. Later, more of each payment reduces principal.

Extra repayments cut the balance sooner, so later interest never accrues. An offset account does something similar by reducing the balance interest is charged on, while keeping the cash available.

Start with the mortgage calculator, then extra repayments and offset.