Mortgage Repayment Calculator

A principal-and-interest repayment covers the interest charged on your remaining balance plus a slice of the principal. In the early years most of each repayment goes to interest; later the balance has shrunk, so more of each repayment chips away at the principal. The total interest cost depends on the rate, the loan term and any extra repayments.

Principal is the money you originally borrowed. Interest is the cost the lender charges on whatever principal is still outstanding. Every repayment clears some of both, but the split changes over time: early on you are paying mostly interest, and toward the end you are paying mostly principal.

Using an illustrative rate of 6.00% over 30 years, principal-and-interest repayments on a $500,000 loan are roughly $2,998 a month, $1,384 a fortnight or $692 a week. This is an example only, not a rate offer — set your own rate in the calculator above.

At the same illustrative 6.00% rate over 30 years, a $600,000 loan costs roughly $3,597 a month, $1,660 a fortnight or $830 a week. Adjust the rate slider in the calculator above to match the rate you're actually being offered.

It depends how the lender calculates them. If your fortnightly amount is simply half the monthly repayment, you make 26 half-payments a year — the equivalent of 13 monthly repayments instead of 12. That extra amount comes straight off the principal and can cut years off the loan. If the lender recalculates so the annual total is unchanged, the benefit is much smaller.

Extra repayments reduce the principal faster, which means less interest is charged from that point on. The effect is biggest when the extra payments start early. Even $50 or $100 a week can take years off the loan and save tens of thousands in interest.

A higher rate means more of each repayment is eaten by interest, so the total cost over the loan term rises. A lower rate does the opposite. The rate also affects how much lenders will let you borrow, because they test your repayments at a buffered rate above the current one.

An interest-only repayment covers just the interest charged each period, so the principal balance does not fall. The required repayment is lower during the interest-only period, but the total interest cost is higher because you are not paying the loan down. After the interest-only period ends, repayments rise to clear the balance over the remaining term.

A longer term lowers the required repayment but stretches interest over more years, so the total interest is usually higher. A shorter term raises the repayment but reduces the total interest. You can often get the benefit of a shorter term on a 30-year loan by making extra repayments while keeping the lower required repayment as a safety net.

Refinancing can lower repayments if it reduces your rate, stretches the remaining term, or removes unnecessary fees. But the cheapest repayment is not always the cheapest mortgage: a lower repayment over a longer term can cost more in total interest. A better rate combined with the same loan term is usually the cleanest win.

Use your actual rate if you have a loan. If you are comparing options, start with a current owner-occupier variable rate and then test one to two per cent higher. Lenders assess your application at a buffered rate, so it is a useful stress test of your own budget.

No. It is a general information tool that models the figures you enter. It is not credit assistance, it does not assess your eligibility and it is not an offer of finance. Your lender's figures will differ.