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Use our mortgage repayment calculator to work out your mortgage costs and compare the latest interest rates.
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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.
|Loan term||30 years|
|Repayment type||P&I (principal and interest)|
|Total loan cost||$864,733.78|
|Total interest payable||$264,733.78|
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.
|Calculator input||Loan 1||Loan 2|
|Loan term||30 years||30 years|
|Repayment type||P&I (principal and interest)||P&I (principal and interest)|
|Total loan cost||$864,733||$830,065|
|Total interest payable||$264,733||$230,065|
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.
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