How to calculate your mortgage repayments
When you take out a home loan, you are required to make regular minimum interest repayments (as well as any fees) for the amount you have borrowed.
To use our mortgage repayment calculator, there are a few key pieces of information you will need to get the most accurate estimate of your mortgage repayments.
- The principal loan amount
- Your expected loan interest rate
- The length of the loan term
The principal loan amount is the amount of money you plan to borrow from your bank or lender. For example, if the property is valued at $650,000 and you have a 20% deposit of $130,000 then the principal loan amount is $520,000.
If you're not sure about what interest rate to apply, you can use the default interest rate provided or use an advertised comparison rate to get a more accurate estimate of your home loan repayments.
Our home loan repayments calculator also allows you to opt for either a principal and interest or interest-only loan, and see how much you could save in interest if you made regular extra repayments over the life of your loan.
FAQs
With an interest-only loan, you only pay the interest on the amount you have borrowed.
These interest-only loans are for a set period (for example, five years) after which the loan changes to a principal & interest loan.
To avoid paying Lenders Mortgage Insurance (LMI), borrowers need a 20% deposit in most cases.
For example, if you take out a $100,000 loan, your principal starts at $100,000. If your loan has a 4.01 per cent interest rate, you're paying $4.01 cents annually for every $100 you owe. Because your balance usually decreases over the course of the year, however, you won't pay 4.01 per cent of $100,000, but a slightly smaller amount. That's because interest is calculated based on the balance each month.
In addition, many home loans come with product features like offset sub-accounts that help reduce your interest paid, allowing you to pay down more of your principal and take years off your home loan.
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Important information
The estimated repayments provided should be used as a guide only, should not be relied on as true indication of your home loan repayments, or a quote or indication of pre-qualification for any home loan product. The figures are based upon the information you put into the calculator. We've made a number of assumptions when producing the calculations including:
Loan term and loan amount: We assume the loan term and loan amount have been correctly entered into the calculator.
Interest rates: We assume that the rate you enter, is the rate that will apply to your loan for the full loan term – even if you choose:
a variable rate; or
an interest-only rate which, in practice, will only apply for a limited period after which a different rate will apply.
Interest and repayments: The displayed total interest payable is the interest for the loan term, calculated on the entered interest rate. We make the following assumptions about repayments:
repayments are made monthly.
your annual interest charge is divided equally over 12 monthly payments (in practice, interest is calculated daily and charged monthly which can lead to your interest charge varying between months).
interest is charged to the loan account at the same frequency and on the same day as the repayments are made (this may not be the case in practice).
only your initial repayment amount is calculated. We assume that this repayment amount is payable for the loan term. In practice, repayment amounts can change for a variety of reasons.
weekly and fortnightly loan repayment amounts are assumed to be a quarter and a half of the monthly repayment amount respectively.
When selecting interest-only (IO) repayments, it is assumed the loan reverts to principal and interest (P&I) repayments after five years.
Conditions, eligibility, and lending criteria apply.