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Loan repayment calculator
Use Finder's home loan repayment calculator to work out your mortgage costs and compare the latest interest rates.
Home Loans
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With Finder's loan repayment calculator you can quickly calculate your monthly or fortnightly mortgage repayments. All you need to do is enter the following details:
- Loan term: This is the length of the home loan (put 30 years if you're not sure yet).
- Loan amount: This is the amount you wish to borrow or refinance (again, just put down an estimate if you're not sure yet).
- Interest rate: This depends on your home loan, and if you're not sure you can find a rate in the table in the second tab.
- Payment frequency: See how your repayments look monthly, fortnightly or weekly.
Calculate your home loan repayments now
Just put some details into the calculator below and you will get an estimate of your home loan repayments.
How does the loan repayment calculator work?
Here's a simple example of what the calculator can tell you and what it means.
Example calculation
| Calculator input | Details |
|---|---|
| Loan term | 30 years |
| Loan amount | $600,000 |
| Interest rate | 2.60% |
| Payment frequency | Monthly |
| Repayment type | P&I (principal and interest) |
| Repayment | $2,402 |
| Total loan cost | $864,733.78 |
| Total interest payable | $264,733.78 |
The repayment calculation comes with three parts:
- Repayments: This is how much you will have to repay each month, fortnight or week depending on your payment frequency.
- Total cost of loan: This is the entire amount you will pay over the course of the loan, including the loan amount and the interest charged.
- Total interest payable: This is the amount of interest you end up paying on top of the amount you've borrowed.
How does the repayment calculation work?
Banks calculate your home loan repayment using a formula that takes into account the principal, or original amount you borrowed, your monthly interest rate and the number of payments over the life of the loan.
The formula is a bit complicated but generally looks like this:
M = P [i(1+i)^n/ 1-(1+i)^n]
If that makes your head hurt, we'll break it down further for you.
- M = Your monthly repayment, the figure you're trying to solve for.
- 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'll 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 good scientific calculator can't sort out. Or, you can simply use our home loan repayment calculator above to save yourself a lot of guesswork and head-scratching.
How does my loan term, repayment type and frequency affect my repayments?
Every field of the calculator affects your repayments. Obviously the loan amount and interest rate have the biggest impact, but so do all the other fields. Here's how it works:
- Loan term. A longer loan term means lower monthly or fortnightly repayments but you will end up paying more in interest over time. This is because you take longer to repay the loan and are charged more interest.
- Repayment type. If you pick principal and interest repayments your overall loan costs will be lower. This is because interest only repayments defer the total cost of your loan until after the interest only period ends. 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. Making repayments fortnightly actually works out cheaper because you're making one extra month of repayments per year.
How can I repay my home loan faster or save money on my home loan?
Everyone wants to pay less on their mortgage.You can do this by paying the loan off faster or by 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 home loan you need is a great way to save cash. Even just a small difference in a home loan's interest rate can add up over the long life of a home loan.
Here's the example home loan from earlier in this article, with an interest rate of 2.60%, but now compared to a lower rate of 2.29%. Everything else about the loan remains the same. But the difference in the loan repayment calculation is significant.
| Calculator input | Loan 1 | Loan 2 |
|---|---|---|
| Loan term | 30 years | 30 years |
| Loan amount | $600,000 | $600,000 |
| Interest rate | 2.60% | 2.29% |
| Payment frequency | Monthly | Monthly |
| Repayment type | P&I (principal and interest) | P&I (principal and interest) |
| Repayment | $2,402 | $2,305 |
| 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 loan repayments to be $34,668 less. That's a saving of $2,889 a year.
Learn more about finding the cheapest home loan for you.
Save a bigger deposit
Another way to reduce your loan repayment costs is to save a bigger deposit and borrow less. This is easier said than done, of course. But if you can scrape together a bigger deposit it does make a difference.
Read our in-depth guide on saving a home loan deposit
Make extra repayments (or better yet, use an offset account)
Once you have your home loan, you can cut down your total repayment costs by putting some extra money into your loan. There are two ways you can do this:
- Extra repayments. Most loans allow you to repay more than the monthly minimum amount. These extra repayments effectively cut down how much you have to pay in interest. Use our extra repayment calculator to learn how it works.
- Offset account. If your loan has a 100% offset account then you can save any extra money there instead of making extra repayments on the loan. Money 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 actually get you slightly ahead on your loan repayments. Try it out for yourself using the loan repayment calculator, or use our bi-monthly repayment calculator (this is very helpful if you already have a home loan with monthly repayments).
When taking out a new home loan you can set up fortnightly repayments from day one. If you already have a home loan you may need to log in to your online banking portal or call the lender to change the repayment frequency.
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Common questions about loan repayments
We've answered some common loan repayment questions for anyone using our calculator.
How can I find out exactly how much my loan repayments will be?
Using a key facts sheet is the best way to get accurate information on your home loan repayments. Each lender should provide you with a key facts sheet, a document that gives you all the information you need on your mortgage payments.
Will my repayments change over time?
Yes. While our calculator provides a very accurate estimate, even a lender's own calculations are only true if every detail of your home loan remains unchanged for the entire loan term. But that never happens.
Whether your home loan has a fixed or variable interest rate, this rate will eventually change. Rates simply can't stay the same over the life of a home loan. This means your repayments will change too.
How do principal and interest payments work?
Each home loan repayment you make will be split between the principal, or initial amount you borrowed, and interest, or the percentage of the principal the lender charges for lending you money.
When you begin repaying your home loan, the majority of your repayment will go toward interest with a smaller proportion paying down the principal. As you pay off more of the principal, the proportion of each regular payment devoted to the interest will decrease and the proportion devoted to the principal will increase.
How do interest rates work?
Interest is the amount the lender charges for lending you money. It's calculated on a daily basis as a percentage of the remaining principal. For a full discussion on how home loan interest is calculated, check out our interest calculation guide.
Are home loans an example of compound interest?
Home loan interest rates behave in some ways like compound interest. Compound interest is interest added to the principal of a deposit so that the deposit earns interest on the original balance, plus the interest already earned. However, with a home loan, the principal is reducing so the amount that interest is being charged on is also shrinking.
Can a mortgage broker help me calculate my loan repayments?
Yes. A broker can guide you through every step of the home loan journey. They present you with several suitable home loans and can calculate what your repayments will look like.
Talk to a mortgage broker and get expert help.