Mortgage calculator

Keen to know how to calculate monthly repayments on your home loan? With our mortgage repayment calculator, you can quickly calculate how much your mortgage will cost you each week, fortnight or month. Just enter the following details:

• Loan term: This is the length of the mortgage (enter 30 years if you’re not yet sure).
• Loan amount: This is the amount you wish to borrow or refinance (again, just put down an estimate if you’re not yet sure).
• Interest rate: This depends on your mortgage, so if you don’t have a rate yet, you can look at some lenders’ rates on our page.
• Payment frequency: See how your repayments look monthly, fortnightly or weekly.

Calculate your mortgage repayments now

Just enter the details into the calculator below, and you’ll receive an estimate of your mortgage repayments.

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

The repayment calculation consists of three parts:

• Repayments: This is how much you have to repay each month, fortnight or week, depending on your payment frequency.
• The total cost of the mortgage: This is the entire amount you pay throughout the mortgage, including the loan amount and the interest charged.
• Total interest payable: This is the amount of interest you pay on top of the amount you borrow.

How does the repayment calculation work?

Banks calculate your mortgage repayment using a formula that considers the principal, or original amount you borrow, your monthly interest rate and the number of payments over the life of the loan.

The formula is a bit complicated but typically looks like this:

If that makes your head hurt, we’ll break it down further for you.

• M = Your monthly repayment, the figure for which you’re trying to solve.
• 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 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 scientific calculator can’t sort out. Or, you can use our mortgage repayment calculator above to save yourself a lot of guesswork and head-scratching.

How do my mortgage term, repayment type and frequency affect my repayments?

Every field of the calculator affects your repayments. Of course, the loan amount and interest rate have the most significant impact, but the other areas do too. Here’s how it works:

• Loan term. A longer loan term means lower monthly or fortnightly repayments, but you end up paying more interest over time because you take longer to repay the loan, and the lender charges you more interest.
• Repayment type. If you pick principal and interest repayments, your overall mortgage costs are lower because interest-only repayments defer the total cost of your mortgage until after the interest-only period ends. However, 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. So making repayments fortnightly actually works out cheaper because you’re making one extra month of repayments per year.

How can I repay my mortgage faster or save money?

Everyone wants to pay less on their mortgage. You can do this by paying off the loan faster or 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 mortgage you need is a great way to save cash. Even a tiny difference in the mortgage interest rate can add up over its long life.

Here’s the example mortgage from earlier, but with an interest rate of 2.60% compared to a lower rate of 2.29%. Everything else about the loan remains the same. However, the difference in the loan repayment calculation is significant.

Over 30 years, with a lower interest rate of 2.29%, we can calculate your mortgage repayments to be $34,668 less. That’s a saving of $2,889 a year.

Save a bigger deposit

Another way to reduce your mortgage repayment costs is to save a bigger deposit and borrow less, which of course, is easier said than done. However, if you can scrape together a larger deposit, it does make a difference.

Read our in-depth guide on saving a house deposit

Make extra repayments (or better yet, use an offset account)

Once you have a mortgage, you can cut down the total repayment costs by putting extra money into your loan. There are two ways you can do this:

• Extra repayments. Most mortgages allow you to repay more than the monthly minimum amount. These extra repayments effectively cut down how much you have to pay in interest.
• Offset account. If your mortgage has a 100% offset account, then you can save any extra money there instead of making additional repayments on the loan. Cash 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 get you slightly ahead on your loan repayments.

When taking out a new mortgage, you can set up fortnightly repayments from day one. If you already have a mortgage, you may need to log in to your online banking portal or call the lender to change the repayment frequency.

Common questions about mortgage repayments

We’ve answered some common mortgage 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 mortgage 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 calculations are only precise if every detail of your mortgage remains unchanged for the entire loan term. However, that never happens.

  Whether your mortgage has a fixed or variable interest rate, this rate eventually changes. Rates can’t stay the same over the life of a mortgage, which means your repayments change too.

• How do principal and interest payments work?

  The lender splits each mortgage repayment you make 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 mortgage, most of your repayment goes 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 decreases and the proportion devoted to the principal increases.

• How do interest rates work?

  Interest is the amount the lender charges for lending you money. It’s calculated daily as a percentage of the remaining principal. For a full discussion on how lenders calculate mortgage interest, check out our interest calculation guide.

• 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 mortgages and can calculate your repayments.

  Talk to a mortgage broker and get expert help.