Calculator Assumptions: The above calculations are worked out assuming you’re paying off a principal and interest or interest only home loan where the interest rate remains the same over the life of the loan. The repayment amounts do not take into account any additional fees or charges that may be charged to your loan (e.g. application fees or lenders' mortgage insurance premiums).
Disclaimer: Whilst every effort has been made to ensure the accuracy of this calculator, the results should be used as indication only. They are neither a quote nor a pre-qualification for a loan.
How does the loan repayment calculator work?
Here's a simple example of what the calculator can tell you and what it means.
Example calculation
Calculator input
Details
Loan term
30 years
Loan amount
$600,000
Interest rate
4.50%
Payment frequency
Monthly
Repayment type
P&I (principal and interest)
Repayment
$3,041
Total loan cost
$1,094,441
Total interest payable
$494,441
The repayment calculation comes with three parts:
Repayments: This is how much you will have to repay each month, fortnight or week depending on your payment frequency.
Total cost of loan: This is the entire amount you will pay over the course of the loan, including the loan amount and the interest charged.
Total interest payable: This is the amount of interest you end up paying on top of the amount you've borrowed.
How does the repayment calculation work?
Banks calculate your home loan repayment using a formula that takes into account the principal, or original amount you borrowed, your monthly interest rate and the number of payments over the life of the loan.
The formula is a bit complicated but generally looks like this:
M = P [i(1+i)^n/ 1-(1+i)^n]
If that makes your head hurt, we'll break it down further for you.
M = Your monthly repayment, the figure you're trying to solve for.
P = The principal on the loan, or original amount you borrowed.
i = Your effective monthly interest rate. Remember, the rate you see advertised by the bank is an annual interest rate, so you'll need to divide by 12 to get your monthly interest rate.
n = The total number of repayments on the loan.
Confused? It's nothing a good scientific calculator can't sort out. Or, you can simply use our home loan repayment calculator above to save yourself a lot of guesswork and head-scratching.
How does my loan term, repayment type and frequency affect my repayments?
Every field of the calculator affects your repayments. Obviously the loan amount and interest rate have the biggest impact, but so do all the other fields. Here's how it works:
Loan term. A longer loan term means lower monthly or fortnightly repayments but you will end up paying more in interest over time. This is because you take longer to repay the loan and are charged more interest.
Repayment type. If you pick principal and interest repayments your overall loan costs will be lower. This is because interest only repayments defer the total cost of your loan until after the interest only period ends. You end up paying more overall.
Repayment frequency. Here's a helpful tip: there are 12 months in a year but there are 26 fortnights. Making repayments fortnightly actually works out cheaper because you're making one extra month of repayments per year.
How can I repay my home loan faster or save money on my home loan?
Everyone wants to pay less on their mortgage.You can do this by paying the loan off faster or by finding other ways to lower your loan costs. Here are some steps you can take:
Get a lower interest rate
Finding the lowest possible interest rate for the type of home loan you need is a great way to save cash. Even just a small difference in a home loan's interest rate can add up over the long life of a home loan.
Here's the example home loan from earlier in this article, with an interest rate of 4.50%, but now compared to a higher rate of 5.00%. Everything else about the loan remains the same. But the difference in the loan repayment calculation is significant.
Calculator input
Loan 1
Loan 2
Loan term
30 years
30 years
Loan amount
$600,000
$600,000
Interest rate
4.50%
5.00%
Payment frequency
Monthly
Monthly
Repayment type
P&I (principal and interest)
P&I (principal and interest)
Repayment
$3,041
$3,221
Total loan cost
$1,094,441
$1,159,535
Total interest payable
$494,441
$559,535
Over 30 years, the higher interest rate on loan 2 would cost you an extra $65,094. That's a huge increase in costs for just 50 more basis points added to the interest rate.
Another way to reduce your loan repayment costs is to save a bigger deposit and borrow less. This is easier said than done, of course. But if you can scrape together a bigger deposit it does make a difference.
Make extra repayments (or better yet, use an offset account)
Once you have your home loan, you can cut down your total repayment costs by putting some extra money into your loan. There are two ways you can do this:
Extra repayments. Most loans allow you to repay more than the monthly minimum amount. These extra repayments effectively cut down how much you have to pay in interest. Use our extra repayment calculator to learn how it works.
Offset account. If your loan has a 100% offset account then you can save any extra money there instead of making extra repayments on the loan. Money in your offset account also cuts down your interest, but the money is yours to spend if you need it.
Switch to fortnightly repayments
As we explained above, fortnightly repayments actually get you slightly ahead on your loan repayments. Try it out for yourself using the loan repayment calculator, or use our bi-monthly repayment calculator (this is very helpful if you already have a home loan with monthly repayments).
When taking out a new home loan you can set up fortnightly repayments from day one. If you already have a home loan you may need to log in to your online banking portal or call the lender to change the repayment frequency.
Common questions about loan repayments
We've answered some common loan repayment questions for anyone using our calculator.
How can I find out exactly how much my loan repayments will be?
Using a key facts sheet is the best way to get accurate information on your home loan repayments. Each lender should provide you with a key facts sheet, a document that gives you all the information you need on your mortgage payments.
Will my repayments change over time?
Yes. While our calculator provides a very accurate estimate, even a lender's own calculations are only true if every detail of your home loan remains unchanged for the entire loan term. But that never happens.
Whether your home loan has a fixed or variable interest rate, this rate will eventually change. Rates simply can't stay the same over the life of a home loan. This means your repayments will change too.
How do principal and interest payments work?
Each home loan repayment you make will be split between the principal, or initial amount you borrowed, and interest, or the percentage of the principal the lender charges for lending you money.
When you begin repaying your home loan, the majority of your repayment will go toward interest with a smaller proportion paying down the principal. As you pay off more of the principal, the proportion of each regular payment devoted to the interest will decrease and the proportion devoted to the principal will increase.
How do interest rates work?
Interest is the amount the lender charges for lending you money. It's calculated on a daily basis as a percentage of the remaining principal. For a full discussion on how home loan interest is calculated, check out our interest calculation guide.
Are home loans an example of compound interest?
Home loan interest rates behave in some ways like compound interest. Compound interest is interest added to the principal of a deposit so that the deposit earns interest on the original balance, plus the interest already earned. However, with a home loan, the principal is reducing so the amount that interest is being charged on is also shrinking.
Can a mortgage broker help me calculate my loan repayments?
Yes. A broker can guide you through every step of the home loan journey. They present you with several suitable home loans and can calculate what your repayments will look like.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification.
Home equity can help you access extra financing from lenders to spend on things like home renovations or investment properties. Find out how you can calculate the equity in your home.
Generally, Fixed rate terms are between 1 and 5 years. Most loans give you multiple options, with different rates for each. It’s worth talking to your lender or mortgage broker if you want to explore more about fixed-rate options.
I am wanting to buy a home, the value of the home is about $330 000 and I have $310 000 cash from the sale of my current home.
I just need to borrow about $20 000. I have about $30 000 in my bank, this is for daily expenditure etc. I have no bank card or other debt. I own my cars etc.
My problem is I am on aged pension ( $20 000 pa) and from seasonal work I can generate about $18 000 pa.
I need the borrowings of about $20 000 until such time as I sell a private vehicle and my truck, estimated combined value $ 50 000. I have checked my veda file and I can see no problems. Previous attempts to get funding saw a reluctance due to the nature of my work which is seasonal.
YOur advice to me to get the short term borrowing of $20 000 then i can buy my house.
thanks graham,.
You may refer to our list of pensioners loans. Offering an asset as a security to a loan will up your chances of approval. Moreover, it’s a good idea to reach out to those lenders to check your eligibility before submitting your application as rejected application can negatively affect your credit rating.
When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
I owe 154,000 on my home loan, I am currently paying $469.30 per fortnight,plus an extra $100.00 per fortnight..There is still 15 years and 2 Months to go..How many year will it cut from my loan, with the extra $100 per fortnight?
Rob.
Sheriff just took repo on our house we told we could refinance we need to refinance 210,000 what lender would be the best to go through we are with nab Homeside we have 14 days to do this. Any ideas would be great, thanks
Please note that finder.com.au is an online comparison website so we are not a lender and we do not offer loans ourselves. If you’re after your home loan details, you’ll need to contact your lender directly.
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For how long i can set up a fixed term interest loan? so i will be sure that my loan repayments will stay the same for all the lenght of the loan .
Hi Ivan,
Generally, Fixed rate terms are between 1 and 5 years. Most loans give you multiple options, with different rates for each. It’s worth talking to your lender or mortgage broker if you want to explore more about fixed-rate options.
Thanks,
Rebecca
I am wanting to buy a home, the value of the home is about $330 000 and I have $310 000 cash from the sale of my current home.
I just need to borrow about $20 000. I have about $30 000 in my bank, this is for daily expenditure etc. I have no bank card or other debt. I own my cars etc.
My problem is I am on aged pension ( $20 000 pa) and from seasonal work I can generate about $18 000 pa.
I need the borrowings of about $20 000 until such time as I sell a private vehicle and my truck, estimated combined value $ 50 000. I have checked my veda file and I can see no problems. Previous attempts to get funding saw a reluctance due to the nature of my work which is seasonal.
YOur advice to me to get the short term borrowing of $20 000 then i can buy my house.
thanks graham,.
Hi Graham,
Thanks for leaving a question on Finder.
You may refer to our list of pensioners loans. Offering an asset as a security to a loan will up your chances of approval. Moreover, it’s a good idea to reach out to those lenders to check your eligibility before submitting your application as rejected application can negatively affect your credit rating.
When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Cheers,
Joel
I owe 154,000 on my home loan, I am currently paying $469.30 per fortnight,plus an extra $100.00 per fortnight..There is still 15 years and 2 Months to go..How many year will it cut from my loan, with the extra $100 per fortnight?
Rob.
Hi Rob,
Thanks for your question.
May I know how much your current interest rate is so I can assist you further?
Thanks and cheers,
Anndy
Sheriff just took repo on our house we told we could refinance we need to refinance 210,000 what lender would be the best to go through we are with nab Homeside we have 14 days to do this. Any ideas would be great, thanks
Andy
Hi Andy,
Thanks for reaching out.
I’ve sent you an email to follow up with this enquiry.
Thanks,
Belinda
could you send me the dates i made payments and payment amounts loan number X
Hi Keith,
Thanks for reaching out.
Please note that finder.com.au is an online comparison website so we are not a lender and we do not offer loans ourselves. If you’re after your home loan details, you’ll need to contact your lender directly.
Thanks,
Belinda