Lump sum repayment calculator

Use our simple lump sum repayment calculator to work out how much you can save by making a lump sum repayment on your home loan.

Our lump sum repayment calculator can help you work out how much money you can save by adding extra lump sums to your repayments. An extra repayment can also reduce your loan term, so you own your home sooner.

Here's how it works. If you make a large, one-off extra repayment (a lump sum) to your mortgage, you are reducing the principal amount of debt. This means you end up paying less interest in the long run, too.

Our lump sum repayment calculator is an easy tool that lets you estimate how much a lump sum repayment can save you in time and interest.

How to use the lump sum repayment calculator

In order to use a lump sum calculator, you’ll need the following details:

  • Your loan amount. This is the amount of money you borrowed.
  • The loan term. This is the length of your home loan. Most Australians choose between 20 and 30-year loan terms.
  • The interest rate. The loan's interest rate affects how much interest you pay every month.
  • The repayment frequency. Repayments can be weekly, fortnightly, or monthly, depending upon your agreement with your lender.
  • Lump sump repayment. Enter the single amount you wish to add to the loan as a lump sum repayment.
  • Lump sum made at year. This refers to when you make the lump sum repayment. If you're 2 years into your loan, select 2 years.

Once you input all of the necessary information into the calculator you'll be able to see the results right away and figure out if putting a lump sum toward your mortgage will be worth it in terms of savings. Usually a lump sum payment will go toward your principal more so than interest, which will help you pay down your loan faster than just making general repayments.

Example: Susan's lump sum repayment

Susan just inherited $10,000 unexpectedly. She decides to pay it as a lump sum toward her mortgage. In order to figure out exactly what a lump sum will do for her mortgage she uses a lump sum calculator.

Susan inputs her:

  • Original loan amount: $300,000
  • Interest rate: 3.0%
  • Loan term (30 years) and her repayment frequency (monthly)

Susan then inputs her lump sum information. She is looking to put down $10,000 and has already had her mortgage for 2 years. If she were to put a lump sum of $10,000 toward her loan, she'll save $12,654 in interest and take 1 year and 5 months off her loan.

Her monthly repayments are currently $1,265. This means Susan won't have to pay her mortgage repayment for 17 months, which is $21,505 in total, back in her pocket. Not a bad return for a $10,000 lump sum payment!

* This is a fictional, but realistic, example.

An alternative to making a lump sum repayment is an offset account

If you have come into a large sum of money, you don't have to throw it straight into your home loan. If your home loan has an offset account, you save the money in the account and you'll enjoy a similar benefit to the lump sum repayment but with greater flexibility.

An offset account is a bank account connected to your home loan. Any money that you save in it temporarily reduces (or offsets) your loan principal. This means your repayments stay the same, but you're paying less interest and so you pay off the whole loan faster.

This is the same benefit as a lump sum repayment but with a huge difference. Once you pay the lump sum into your home loan, it's gone. Your lender may let you access some of it via a redraw facility but it's their money now.

With an offset account you still retain total control over the cash while receiving the same benefit. So if you suddenly need some money to cover an urgent expense, it's right there. It's the best of both worlds.

However, if your loan doesn't have an offset account and you're confident you won't need the lump sum again any time soon, then simply throwing it into your home loan is not a bad idea. Getting out of debt faster is always wise.

Compare home loans from across the market

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Name Finder Score Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Unloan logo
Principal & Interest20% min. depositOwner-occupierRefinance Only
Unloan logo
Principal & Interest20% min. depositOwner-occupierRefinance Only
Go to site
Product NameUnloan Variable Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest
Interest Rate p.a.5.99%
Comp. Rate p.a.5.90%
Minimum Loan Amount$10,000
Maximum Loan Amount $10,000,000
Maximum Loan Term30 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableNo
Extra Repayments Yes
Finder score
Interest Rate
5.99%
Comparison Rate
5.90%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$900
Go to siteView details
loans.com.au logo
Principal & Interest10% min. depositOwner-occupierOffset account
loans.com.au logo
Principal & Interest10% min. depositOwner-occupierOffset account
Go to site
Product Nameloans.com.au Variable Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest
Interest Rate p.a.6.04%
Comp. Rate p.a.6.06%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,000,000
Maximum Loan Term30 years
Maximum LVR 90%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest Option
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
6.04%
Comparison Rate
6.06%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$905
Go to siteView details
Macquarie Bank logo
Principal & Interest20% min. depositOwner-occupier
Macquarie Bank logo
Principal & Interest20% min. depositOwner-occupier
Go to site
Product NameMacquarie Bank Basic Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest
Interest Rate p.a.6.19%
Comp. Rate p.a.6.21%
Minimum Loan Amount$150,000
Maximum Loan Amount $10,000,000
Maximum Loan Term30 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityYes
Fixed Interest OptionNo
Loan PortableNo
Extra Repayments Yes
Finder score
Interest Rate
6.19%
Comparison Rate
6.21%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$919
Go to siteView details
Unloan logo
Principal & Interest20% min. depositInvestmentRefinance Only
Unloan logo
Principal & Interest20% min. depositInvestmentRefinance Only
Go to site
Product NameUnloan Variable Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest
Interest Rate p.a.6.29%
Comp. Rate p.a.6.20%
Minimum Loan Amount$10,000
Maximum Loan Amount $10,000,000
Maximum Loan Term30 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableNo
Extra Repayments Yes
Finder score
Interest Rate
6.29%
Comparison Rate
6.20%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$929
Go to siteView details
loans.com.au logo
Principal & Interest10% min. depositOwner-occupierOffset account
loans.com.au logo
Principal & Interest10% min. depositOwner-occupierOffset account
Go to site
Product Nameloans.com.au Solar Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest
Interest Rate p.a.5.99%
Comp. Rate p.a.6.51%
Minimum Loan Amount$50,000
Maximum Loan Amount $1,500,000
Maximum Loan Term30 years
Maximum LVR 90%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest Option
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
5.99%
Comparison Rate
6.51%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$900
Go to siteView details
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What is Finder Score?

The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.

To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.

Read the full Finder Score breakdown

To make sure you get accurate and helpful information, this guide has been edited by Hannah Nissen-Ellison as part of our fact-checking process.
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Editor

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. See full bio

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Richard has written 554 Finder guides across topics including:
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2 Responses

    Default Gravatar
    garethJuly 8, 2013

    hi, we are about to receive a 100k lump sum we have two home loans on the one property 213k at 5.45% and 129k at 5.69% also a 7k personnel loan at 16.4%. into which loan(s) should we place the money

      AvatarFinder
      ShirleyJuly 9, 2013Finder

      Hi Gareth,

      Thanks for your comment.

      Since finder.com.au is a comparison website we’re not licensed to give any personalised financial advice. You may want to consider speaking to a financial advisor.

      Cheers,
      Shirley

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