Mortgage Repayment Calculator Australia

How your mortgage repayment is worked out

A principal and interest home loan uses the standard amortisation formula. Each repayment covers the interest charged on the balance for that period, and whatever is left over reduces the principal. Because the balance shrinks over time, the interest portion of each repayment falls and the principal portion rises. The formula that ties it together is repayment = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the loan amount, r is the interest rate for a single period, and n is the total number of repayments. This calculator applies it for monthly, fortnightly and weekly repayments.

Monthly, fortnightly or weekly repayments

The frequency you choose changes the size of each repayment, not the maths behind it. A fortnightly repayment is worked out on a true fortnightly period, with 26 repayments a year, so it is not the monthly figure halved. Over the same term, the three frequencies cost close to the same in total interest. The popular saving comes from paying half of your monthly repayment every fortnight: that adds up to the equivalent of 13 monthly repayments a year, which pays the loan down faster. The comparison table above shows all three side by side.

Interest-only vs principal and interest

Principal and interest repayments pay down the loan so it clears by the end of the term. Interest-only repayments cover just the interest, so the balance holds steady and the full loan is still owing when the interest-only period ends. The repayments are lower while they last, which suits some investors, but you pay more interest overall because the balance never falls. Toggle between the two above to see the gap for your own loan.

A home loan calculator for any Australian lender

This works as a home loan calculator whichever bank or lender you are with, because the amortisation maths is the same across the market. Enter the amount you are borrowing, your interest rate and the term, and you get the repayment, the total interest and the total repaid. To compare two deals, run your figures once at each rate: on a $600,000 loan over 30 years, dropping the rate from 6% to 5.5% cuts the monthly repayment by roughly $190 and saves tens of thousands in interest across the term. Add extra repayments to see how much sooner the loan clears.

A worked example

Take a $600,000 loan at 6% p.a. over 30 years, paid monthly. The period rate is 6% ÷ 12 = 0.5%, over 360 repayments, which gives a repayment of about $3,597 a month. Across the full term that adds up to roughly $1,295,000 repaid, of which around $695,000 is interest, more than the amount borrowed. Shorten the term or lower the rate and the total interest drops sharply, which is why the term and rate matter as much as the loan amount.

Frequently asked questions