Mortgage Calculator
Calculate your home loan repayments with Australian payment frequencies. See how extra payments can save you thousands in interest and years off your mortgage.
Loan Details
How Much Will My Repayments Be?
Your home loan repayments depend on three main factors:
- Loan amount: The total amount you borrow from the lender
- Interest rate: The annual percentage rate charged by your lender
- Loan term: The length of time to repay the loan (typically 25-30 years in Australia)
Use the calculator above to see your estimated repayments based on different scenarios. Remember that interest rates can change, affecting your repayments if you have a variable rate loan.
Weekly vs Fortnightly vs Monthly Payments
The frequency of your repayments can significantly impact how quickly you pay off your home loan:
| Payment Frequency | Payments per Year | Benefits |
|---|---|---|
| Monthly | 12 | Standard option, aligns with monthly salary |
| Fortnightly | 26 | Popular choice, makes equivalent of 13 monthly payments per year |
| Weekly | 52 | Fastest repayment, best for weekly income |
💡 Pro Tip: Paying fortnightly instead of monthly can save you years off your mortgage and thousands in interest, without significantly changing your budget!
How Can I Repay My Loan Sooner?
Paying off your home loan faster can save you tens of thousands of dollars in interest. Here are proven strategies:
1. Make Extra Repayments
Even small additional payments reduce your principal and save on interest. Try adding $50-$200 per week or making annual lump sum payments.
2. Pay Fortnightly
By paying half your monthly amount every two weeks, you make 26 payments (13 months' worth) instead of 12, accelerating your loan payoff.
3. Use Offset Accounts
Money in an offset account reduces the interest charged on your loan. Keep your savings in an offset account to minimize interest.
4. Review Your Interest Rate
Regularly compare rates and negotiate with your lender. A rate reduction of even 0.25% can save thousands over your loan term.
5. Avoid Interest-Only
Interest-only periods may seem attractive with lower payments, but you're not reducing your debt. Stick to principal and interest.
6. Redirect Windfalls
Put tax refunds, bonuses, and pay rises directly into your mortgage. These lump sums make a significant dent in your principal.
Understanding Loan Types
Principal and Interest Loans
The most common type of home loan in Australia. Each repayment covers both the interest charges and reduces the principal (loan amount).
Pros: Gradually pay off your debt, build equity, lower total interest paid
Cons: Higher initial repayments than interest-only
Interest-Only Loans
You only pay the interest for an agreed period (typically 1-5 years), then revert to principal and interest repayments.
Pros: Lower initial repayments, can be tax-effective for investors
Cons: Don't reduce loan balance, much higher repayments when interest-only period ends, pay more interest overall
⚠️ Warning: Interest-only loans can be risky for owner-occupiers. Your loan balance doesn't decrease, and you'll face payment shock when the interest-only period ends.
Fixed vs Variable Interest Rates
Fixed Rate
Interest rate is locked in for a set period (typically 1-5 years), providing certainty over your repayments.
Variable Rate
Interest rate can go up or down based on market conditions and lender decisions, affecting your repayments.
Split Loan Option: Many borrowers choose a split loan (part fixed, part variable) to get the benefits of both. For example, fix 50% for rate certainty and keep 50% variable for flexibility.
Frequently Asked Questions
How do I calculate my home loan repayments?
To calculate home loan repayments, you need the loan amount, interest rate, and loan term. The calculator uses these to determine your regular repayments. For example, a $500,000 loan at 6% interest over 30 years equals approximately $2,998 per month or $1,384 fortnightly.
Should I pay my mortgage weekly, fortnightly, or monthly?
Paying fortnightly (26 payments per year) or weekly (52 payments) can save you money compared to monthly payments (12 per year). By paying more frequently, you make the equivalent of one extra monthly payment per year, reducing your loan faster and saving on interest. Choose the frequency that matches your income schedule.
How much can extra repayments save me?
Extra repayments can significantly reduce your loan term and interest paid. For example, adding $200 per month to a $500,000 loan at 6% over 30 years could save you over $70,000 in interest and reduce your loan term by approximately 5 years. Use the extra repayments field in the calculator above to see your potential savings.
What's the difference between principal and interest vs interest-only loans?
Principal and interest loans have you paying off both the loan amount and interest each payment, gradually reducing the debt. Interest-only loans only pay the interest for a set period (typically 1-5 years), keeping payments lower but not reducing the principal. After the interest-only period ends, payments increase significantly as you start paying principal as well.
What is an offset account and how does it work?
An offset account is a transaction account linked to your home loan. The balance in your offset account is subtracted from your loan balance when calculating interest. For example, if you have a $500,000 loan and $20,000 in your offset account, you only pay interest on $480,000. This reduces your interest charges without requiring you to make extra repayments, and you still have full access to your money.
How much deposit do I need for a home loan?
Most lenders require at least a 20% deposit to avoid Lenders Mortgage Insurance (LMI). However, some loans are available with deposits as low as 5-10%, though you'll pay LMI which can cost thousands of dollars. First home buyers may access schemes like the First Home Guarantee with just 5% deposit and no LMI.
Can I pay off my mortgage early?
Yes, most variable rate loans allow unlimited extra repayments without penalty. However, fixed rate loans often have limits (e.g., $10,000-$30,000 per year) and may charge break fees if you pay off the loan entirely before the fixed period ends. Always check your loan conditions.
Related Resources
How to Save $50,000 on Your Home Loan
Proven strategies to save tens of thousands on your Australian home loan.
How to Use Loan Calculators Effectively
Master loan calculations with different repayment frequencies.
First Home Buyer's Financial Checklist
Complete financial preparation guide for first home buyers.
Home Loan Refinancing Guide: When and How to Switch
Save thousands by refinancing. Learn when to refinance and compare rates.
Disclaimer
This mortgage calculator provides estimates only and is not a substitute for professional financial advice. Interest rates, fees, and loan terms vary between lenders. Your actual repayments may differ based on your specific circumstances and lender conditions. This calculator does not include fees, charges, or government charges such as stamp duty. For personalized advice, consult a licensed financial adviser or mortgage broker. Rates and conditions are subject to change.