Mortgage repayment calculator

Calculate the cost of your home loan repayments using our loan repayment calculator to find out how much you can afford to borrow. Compare how different interest rates, loan terms and repayment frequency can impact the cost of your loan.

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Loan term: 30 years, Repayment frequency: Monthly

years

 

Why should I use a mortgage repayment calculator?

A home loan is the biggest expense most people will ever have. That’s why it’s important to use a mortgage repayment calculator to work out how much your potential home loan repayments could be before applying for a loan, so you know how much you can afford to borrow.

A home loan repayment calculator can help you compare the costs of taking out a home loan and give you an idea of what your monthly repayments could be. Having an understanding of what your monthly (or fortnightly or weekly) repayments could be can help you to work out whether the loan is something you can afford, and what the total cost of the loan will be over the full loan term.

How does the mortgage repayment calculator work?

Your Mortgage’s mortgage calculator considers a variety of factors to determine how much your regular repayments will be over the loan term.

While there are many factors that can influence this calculation such as changes in interest rates, a decision to refinance, or using a redraw facility, the calculator will still be able to give you an estimate of how much your regular repayments could be and the total interest paid over the life of the loan.

By changing the interest rate, loan term, and repayment frequency fields, you can compare how these differences can impact your repayments.

Disclaimer: The results yielded by the calculator assume no changes in interest rates over the loan term. This means whatever interest rate you use will be applied for the whole loan term.

How does my loan term, frequency and repayment type impact my repayments?

There are many factors that can have an impact on your repayments, the most obvious ones being the interest rate and the loan amount. Other factors, such as the loan term, repayment frequency and type can also have an impact on your repayments.

Loan term: A longer loan term means your monthly repayments will be smaller, but over the total loan term you will actually end up paying more in interest because the interest has more time to accumulate. If you chose a shorter loan term, your monthly or fortnightly repayments may be bigger, but you’ll pay less interest over the life of the loan. That also means your overall loan amount will be smaller than if you chose a longer loan term.

For example, let’s say you take out a $500,000 loan over a 30-year loan term, making monthly principal and interest repayments with an interest rate of 2.5% p.a. Here’s how your repayments could change with different loan terms.

Loan term

Monthly repayments

Total loan repayments

Total interest paid

30 years

$1,975.60

$711,217.62

$211,217.62

25 years

$2,243.08

$672,925.10

$172,925.10

 

By choosing a 25-year loan term instead of a 30-year term, your monthly repayments would be $267 higher but you would save $38,292 in total loan repayments and in total interest paid over the life of the loan.

Repayment frequency: Making more frequent repayments can also have an impact on your overall monthly repayments. For example, there are 12 months in a year but 26 fortnights. If you make fortnightly repayments instead of monthly ones, you’re making one extra month of repayments per year which works out to be cheaper.

For example, let’s say you take out a $500,000 loan over a 30-year loan term, making monthly principal and interest repayments with an interest rate of 2.5% p.a. Here’s how your repayments could change by making more frequent repayments.

Repayment frequency

Repayment amount

Total loan repayments

Total interest paid

Monthly

$1,975.60

$711,217.62

$211,217.62

Fortnightly

$911.47

$710,950.07

$210,950.07

Weekly

$455.66

$710,835.38

$210,835.38

 

Repayment type: If you choose principal and interest repayments, your monthly loan repayments may be higher but your overall loan costs will be lower, because you’re chipping away at the amount you’ve borrowed as well as the interest portion of the loan.

On the other hand, if you choose to only make interest-only repayments, your monthly repayment amounts may be smaller but the overall cost of the loan will be bigger because you’re deferring paying off the amount borrowed.

How can I pay off my loan faster or save money on my loan?

No one wants to spend more money than they need to on anything, including their home loan. There are plenty of ways you can save on your mortgage, including:

Find a lower interest rate

Getting the lowest possible interest rate is one of the easiest ways to save on your home loan. If it’s been a while since you’ve checked your interest rate, you could be paying too much.

We’ve used the example home loan from above to demonstrate how a lower interest rate can impact your repayments and overall loan amount.

Calculator inputs

Loan 1

Loan 2

Loan 3

Interest rate

3%

2.5%

2%

Repayment frequency

Monthly

Monthly

Monthly

Repayment type

Principal and interest

Principal and interest

Principal and interest

Monthly repayments

$2,118

$1,986

$1,858

Total loan cost

$762,487

$714,818

$668,915

Total interest (including fees)

$262,487

$214,818

$168,915

*The table above assumes an owner occupier loan over a 30-year loan term with a $500,000 loan amount and $10 monthly fees.

Make extra repayments

An easy way to pay your loan off faster is by making extra repayments into your loan. You can do this by paying more than the monthly (or fortnightly or weekly) minimum amount. Use our extra and lump sum repayment calculator to see how making extra repayments can reduce your loan amount.

The other way to make extra repayments into your loan is by using an offset account. An offset account is an everyday banking account that’s linked to your home loan, where you can deposit your savings and your regular wages. Any money that’s in your offset account is then ‘offset’ against your home loan balance, reducing the amount of interest you have to pay over the life of the loan.

Make more frequent repayments

As well as making extra repayments, making more frequent repayments can also help you get ahead on your loan. For example there are 12 months in a year but 26 fortnights. If you make fortnightly repayments instead of monthly ones, you’re making one extra month of repayments per year which puts you slightly ahead.

Save a bigger deposit

Saving up a bigger deposit can help you reduce your loan repayment because you’re borrowing less. Obviously this isn’t an option for everyone, particularly if property prices are rising faster than your ability to save a bigger deposit.

Why is adopting a loan repayment strategy important?

As you can see from some of the earlier examples, even small changes to your repayments can save you thousands of dollars in the long run. A saving of just 0.25% on your home loan will make a giant dent in the total interest paid over 30 years or switching to bi-weekly or fortnightly payments can decrease the amount of time it will take to pay off your loan.

Small adjustments can lead to major changes, so testing different options in the mortgage repayment calculator is worth the effort. And while it’s still best to speak to a professional, which you can do for free here, this calculator is an ideal starting point. You can also try testing our Borrowing Power Calculator to have an idea of how much you can afford to borrow.

Frequently asked questions about mortgage repayments

1. How do you calculate mortgage repayments?

The easiest way to calculate your mortgage repayments is by using a mortgage repayment calculator like the one above, but you can also use equations or spreadsheets to work out what your repayments could be. To calculate your repayments you need to know what the principal is (the amount you’re borrowing), what the interest rate is and loan term is.

2. Will my mortgage repayments change over time?

Yes. Our calculations are only accurate if every detail in your loan remains unchanged for the duration of the loan term, which never happens. Over the life of your loan, the interest rate will fluctuate which will impact your repayments.

3. How do interest rates affect mortgage repayments?

Over the life of your loan, your interest rate will fluctuate in line with changes made to the official cash rate, or at the discretion of the lender. Any fluctuation in the interest rate impacts your mortgage repayments. If your interest rate is increased, you’ll be paying more interest on your loan while if your rate is cut, you’ll pay less.

4. How do principal and interest repayments work?

Home loan repayments are made up of two parts: the principal (the amount you’ve borrowed) and the interest charged on the principal. When you make principal and interest repayments, you’re chipping away at both the amount borrowed as well as the interest portion of the loan.

5. How do interest-only repayments work?

Interest-only repayments mean you’re only paying down the interest portion of the loan. While this means your initial monthly repayments will be smaller, you will end up paying more in total over the life of the loan.

6. How can I find out what my home loan repayments will be?

To find out exactly what your mortgage repayments will be, your lender should provide you with a key facts sheet which will give you all the information you need to know about your loan.

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