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How to calculate your home loan repayments

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Use a home loan calculator to remove the guesswork out of your loan repayments

The home loan calculator below will give you an estimate of what your repayments might be for a given interest rate and loan term. You can jump straight into it, or skip ahead and read about out how you can use it to help you with your home loan decision making.

Rates last updated August 23rd, 2017
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The calculator above uses the interest rate as one of the major factors of your calculation. You can compare rates on any of our home loan pages to get an idea of what your loan repayments would be for real world interest rates. Note too that there's an inbuilt loan repayment calculator in all home loan comparison tables, and in every home loan table on finder.com.au. Simply type in your loan amount in the 'borrowing amount' box, and the loan term, and then click 'calculate'. An estimate of your loan repayments for different loans will be displayed in the table.

Home-loan-repayment-calculator2

How do I calculate my home loan repayments?

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 looks a bit complicated:

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.

Why should you use a loan repayment calculator?

A home loan calculator is the perfect tool to help you manage your mortgage repayments and pay off your loan in time. If you are in the market for a new home, finding the mortgage that will best suit your finances is crucial. A home loan repayment calculator can help you easily calculate the required repayments for different home loan amounts, ensuring you take up the right home loan for you in terms of affordability and suitable minimum monthly repayments. If you currently have a mortgage, you could use the home loan repayment calculator to figure out what your new monthly repayments would be if you refinanced to a longer or shorter loan term. You would also be able to keep track of the required mortgage repayments should interest rates fluctuate during the term of your mortgage.

How to use the home loan repayment calculator

If you currently have a mortgage, a home loan repayment calculator can help you figure out how to pay off your loan sooner. New home buyers can also calculate how much they would have to pay on their mortgage and what repayment frequency they would be comfortable with depending on their current financial situation. Using our home loan repayment calculator is simple. All you have to do is enter the following variables to calculate your monthly repayments, total interest on the loan and the total amount you would be required to pay over the term of the loan:

  • Loan amount. This is the amount you intend to borrow on your mortgage.
  • Interest rate. This rate will be determined by your mortgage provider while you are taking out the loan. If you are taking a fixed rate home loan, the rate will remain unchanged for the term of the loan, while a variable rate home loan will have fluctuating interest rates.
  • Loan term. This is the period within which you intend to repay your mortgage. Lenders let you choose a loan term that will suit you, which can be anywhere between 10 and 30 years.
  • Loan type. There are two types of home loans: ones where you make monthly interest and principal repayments, or ones where you make interest-only repayments for a given period and then start paying the principal amount. The loan type you choose will determine what your monthly repayments will be.
  • Repayment frequency. Your mortgage provider will inform you whether you are allowed to make monthly, fortnightly or weekly repayments.

How you can use the home loan repayment calculator

Home loan Repayment Calculator

Finding out the minimum monthly repayments you would have to make on a certain mortgage can help you determine whether it is suited for you. Our home loan repayment calculator lets you alter a range of variables to determine if a certain loan amount would be affordable to you and how long you would need to finish off your mortgage with comfortable repayments. To help you understand how a home loan repayment calculator can help you in your home loan journey, let’s use a case study

If you were to take out a mortgage of $500,000 at a rate of 5.50% p.a. for a loan term of 25 years, your minimum monthly repayments would be $3,070.44 and the mortgage would cost you $921,131 over the course of the loan term. If you paid off that same mortgage weekly, your weekly repayments would be $707.98, with your total loan repayment coming down to $920,377 (close to $800 less). If you needed to reduce your minimum repayments due to financial difficulties, the key would be to refinance to a longer term.

Let’s take the above example but alter the loan term to 30 years. Monthly repayments would then go down to $2,838.90, though the total payments on that same $500,000 mortgage would rise to $1,022,020. With our home loan repayment calculator, you can quickly adjust your repayment frequencies, interest rate, loan term and amount to strike the perfect balance between affordable minimum repayments and a cost-effective home loan.

Common questions about loan repayments

Increasing your loan repayment frequency would be the best way to do this. Weekly or fortnightly repayments enable you to pay off the loan much faster, saving you money on total interest payments.
If you are struggling to keep up with your minimum repayments, you may be able to refinance to a longer loan term, which would effectively lower your minimum monthly repayments. You should contact your lender to discuss options.
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.
As you can see from the calculator, longer loan terms can lower your repayment amount. This is because the amount you're borrowing will be spread out over a longer period of time, and therefore will only require smaller payments to pay off. The drawback to this is that the longer you have your loan, the longer you're paying interest. This in turn means that longer loan terms can actually be more expensive in the long run as you'll pay more interest. Another way to lower your repayment is to borrow less. This could mean saving up a larger deposit, or buying a cheaper property.
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. The graph accompanying the home loan repayment calculator illustrates this.
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 guide.
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. With a home loan, however, the principal is reducing, so the amount interest is being charged on is also shrinking. For a full discussion on how home loan interest is calculated, check out our guide.
The amount of a monthly mortgage payment will depend entirely upon the principal, or original amount borrowed, and the interest rate. If your home loan is a variable interest rate, your repayment could change from month to month. If your loan is a fixed rate, however, your repayments will remain the same.
Comparing different home loans from different mortgage brokers in Australia is the best way to ensure you get a mortgage that you can pay without too much financial strain. Use the finder.com.au home loan calculator to compare home loans from different lenders and get closer to owning a new home today.

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Bank Australia Basic Home Loan - Variable (Owner Occupier)

Pay no ongoing fees on a competitive variable rate home loan.

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NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I)

A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.

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Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)

Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.

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14 Responses

  1. Default Gravatar
    robMay 8, 2017

    I owe 154,000 on my home loan, I am currently paying $469.30 per fortnight,plus an extra $100.00 per fortnight..There is still 15 years and 2 Months to go..How many year will it cut from my loan, with the extra $100 per fortnight?
    Rob.

    Reply
    • Staff
      AnndyMay 9, 2017Staff

      Hi Rob,

      Thanks for your question.

      May I know how much your current interest rate is so I can assist you further?

      Thanks and cheers,
      Anndy

      Reply
  2. Default Gravatar
    AndyApril 17, 2016

    Sheriff just took repo on our house we told we could refinance we need to refinance 210,000 what lender would be the best to go through we are with nab Homeside we have 14 days to do this. Any ideas would be great, thanks

    Andy

    Reply
    • Staff
      BelindaApril 19, 2016Staff

      Hi Andy,

      Thanks for reaching out.

      I’ve sent you an email to follow up with this enquiry.

      Thanks,
      Belinda

      Reply
  3. Default Gravatar
    keithNovember 30, 2015

    could you send me the dates i made payments and payment amounts loan number X

    Reply
    • Staff
      BelindaDecember 1, 2015Staff

      Hi Keith,

      Thanks for reaching out.

      Please note that finder.com.au is an online comparison website so we are not a lender and we do not offer loans ourselves. If you’re after your home loan details, you’ll need to contact your lender directly.

      Thanks,
      Belinda

      Reply
  4. Default Gravatar
    NeilMay 12, 2015

    hi,
    I have an investment property in a trust and are looking to refinance on a interest only loan.
    the property is a 3 bedroom unit in West Perth WA,
    what can you offer me?

    Reply
    • Staff
      BelindaMay 27, 2015Staff

      Hi Neil,

      Thanks for your enquiry.

      finder.com.au is an online comparison service, we are not a lender or an issuing provider.

      However, you may be interested to compare interest-only loans to find a suitable lender.

      Thanks,
      Belinda

      Reply
  5. Default Gravatar
    michaelApril 23, 2015

    I have a good job around 65000 pa I want to buy a home for approx. 210000 but only have 15000 saved up Can you help me please

    Reply
    • Staff
      JodieApril 28, 2015Staff

      Hi Michael,

      Thank you for getting in touch.

      You have come through to finder.com.au, a financial comparison site, we are not able to offer personalised advice please contact a mortgage broker to discuss your needs.

      Regards
      Jodie

      Reply
  6. Default Gravatar
    WendyJanuary 30, 2015

    Can I easily transfer my home loan from another lender to your Super Start Home Loan and am I eligible for a Super Start if I am already in the market?

    Reply
    • Staff
      ShirleyJanuary 30, 2015Staff

      Hi Wendy,

      Thanks for your question.

      The staff at Bankwest will be happy to assist you with the process. The Super Start home loan is available for refinancers and borrowers already in the market.

      You also have the option to get conditional approval over the phone, the process takes about 15-20 mins.

      Cheers,
      Shirley

      Reply
  7. Default Gravatar
    DonnaOctober 15, 2013

    We want to borrow $105,000 and pay the loan off as quickly as possible. Is there a minimum term to have the Dream Loan Express or can it be paid off as quickly as possible. Is the rate of 4.57%p.a. still applicable for this type of loan. Thank you

    Reply
    • Staff
      ShirleyOctober 16, 2013Staff

      Hi Donna,

      Thanks for your comment.

      The minimum loan term is 10 years for the Dream Loan Express.

      Please see this page for current rates.

      Cheers,
      Shirley

      Reply
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