The Next DollarAUSTRALIA

Offset vs invest — the after-tax maths

Spare cash against the mortgage, or into the market? This shows the illustrative after-tax maths for the numbers you put in.

A free learning tool — not financial or tax advice. It doesn't know your circumstances. It computes examples; it doesn't tell you what to do.

Your numbers

Spare cash ($)

Your mortgage rate (% p.a., variable)

Your tax bracket (marginal rate, incl. 2% Medicare levy)

How long you'd hold it 10 years

Advanced assumptions (optional)

Assumed share return (% p.a., total)

of which dividends (% p.a.)

Model the proposed 2027 CGT change (illustrative flat 30% on gains — not law)

Show the debt recycling line (same shares, split interest deductible — refunds banked to the offset)

The illustrative maths

Offset — tax-free saving

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Shares — after tax & CGT

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The gap

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What this assumes (read me)

Want the one-page decision worksheet?

A printable worksheet that walks the same maths for your own situation — plus a note if the 2027 rules actually pass. Pop your email in and it's yours.

General information only — not financial, tax or legal advice. This calculator is an illustrative educational tool. It does not take into account your personal objectives, financial situation or needs, and its outputs are examples based solely on the inputs and assumptions you enter. It is not a recommendation to choose either option. Figures are nominal (not adjusted for inflation) and assume a smooth average share return (real markets are volatile). The offset figure assumes a 100% offset at your loan rate, with a loan balance at least equal to your spare cash. Share figures assume dividends are reinvested and taxed each year at your marginal rate (≈75% franked), the 50% CGT discount on the gain at disposal (or, if selected, the proposed 2027 flat-30% version — which is not law and whose detail may change), and are before brokerage and fund fees. Past performance is not a reliable indicator of future returns. Superannuation, which is more tax-effective for money you can lock away until preservation age, is not modelled here. The optional debt recycling line assumes the split is interest-only at your loan rate, that the borrowing's purpose traces cleanly to the shares (so the interest is deductible), that you have sufficient taxable income to absorb the deduction, and that the annual tax refund is banked to the offset; some lenders price investment splits higher, which reduces the benefit. Debt recycling is a complex, higher-risk strategy that is not suitable for everyone and requires personal advice from a licensed financial adviser and a registered tax agent — this line is illustrative only and is not a recommendation to use it. Always verify current figures with the ATO and obtain advice from a licensed financial adviser and registered tax agent before making any decision. Do your own research.