Lump sum repayment calculator

Use our simple lump sum repayment calculator to work out how much you can save, by making a lump sum repayment on your home loan.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Our lump sum repayment calculator can help you work out how much money you can save by adding extra lump sums to your repayments. An extra repayment can also reduce your loan term, so you own your home sooner.

Here's how it works. If you make a large, one-off extra repayment (a lump sum) to your mortgage, you are reducing the principal amount of debt. This means you end up paying less interest in the long run, too.

Our lump sum repayment calculator is an easy tool that lets you estimate how much a lump sum repayment can save you in time and interest.

How to use the lump sum repayment calculator

In order to use a lump sum calculator you’ll need the following details:

  • Your loan amount. This is the amount of money you borrowed.
  • The loan term. This is the length of your home loan. Most Australians choose between 20 and 30 year loan terms.
  • The interest rate. The loan's interest rate affects how much interest you pay every month.
  • The repayment frequency. Repayments can be weekly, fortnightly, or monthly, depending upon your agreement with your lender.
  • Lump sump repayment. Enter the single amount you wish to add to the loan as a lump sum repayment.
  • Lump sum made at year. This refers to when you make the lump sum repayment. If you're two years into your loan, select 2 years.

Once you input all of the necessary information into the calculator you'll be able to see the results right away and figure out if putting a lump sum toward your mortgage will be worth it in terms of savings. Usually a lump sum payment will go toward your principal more so than interest, which will help you pay down your loan faster than just making general repayments.

Case study

Susan just inherited $10,000 unexpectedly. She decides to pay it as a lump sum toward her mortgage. In order to figure out exactly what a lump sum will do for her mortgage she uses a lump sum calculator.

Susan inputs her:

  • original loan amount, $300,000
  • interest rate, 3.0%
  • loan term (30 years) and her repayment frequency (monthly).

Susan then inputs her lump sum information. She is looking to put down $10,000 and has already had her mortgage for two years. If she were to put a lump sum of $10,000 toward her loan she’ll save $12,654 in interest and take 1 year and five months off her loan.

Her monthly repayments are currently $1,265. This means Susan won't have to pay her mortgage repayment for 17 months, which is $21,505 in total, back in her pocket. Not a bad return for a $10,000 lump sum payment!

An alternative to making a lump sum repayment is an offset account

If you have come into a large sum of money you don't have to throw it straight into your home loan. If your home loan has an offset account you save the money in the account and you'll enjoy a similar benefit to the lump sum repayment but with greater flexibility.

An offset account is a bank account connected to your home loan. Any money that you save in it temporarily reduces (or offsets) your loan principal. This means your repayments stay the same but you're paying less interest and therefore pay off the whole loan faster.

This is the same benefit as a lump sum repayment but with one huge difference. Once you pay the lump sum into your home loan it's gone. Your lender may let you access some of it via a redraw facility but it's their money now.

With an offset account you still retain total control over the cash while receiving the same benefit. So if you suddenly need some money to cover an urgent expense it's right there. It's the best of both worlds.

However, if your loan doesn't have an offset account and you're confident you won't need the lump sum again any time soon then simply throwing it into your home loan is not a bad idea. Getting out of debt faster is always wise.

Compare home loans from across the market

Name Product Interest Rate (p.a.) Comp. Rate (p.a.) Fees Monthly Payment

HSBC Fixed Rate Home Loan Package P&IHome 2Y Fixed≥ 20% Deposit

HSBC Fixed Rate Home Loan Package
  • App: $0
  • Ongoing: $390 p.a.
$3,288 refinance cashback offer
Lock in a low fixed rate for 2 years and buy your home with a 20% deposit. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

UBank UHomeLoan Fixed P&IHome 1Y Fixed≥ 20% Deposit

UBank UHomeLoan Fixed
  • App: $0
  • Ongoing: $0 p.a.
Fix your mortgage for 1 year with a very competitive rate and no ongoing fees.

Westpac Fixed Option Home Loan Premier Advantage Package P&IHome 2Y Fixed≥ 5% Deposit

Westpac Fixed Option Home Loan Premier Advantage Package
  • App: $0
  • Ongoing: $395 p.a.
$3,000 refinance cashback
Lock in a low fixed rate for 2 years that allows you to make up to $30,000 in extra repayments and buy your home with a 5% deposit. $3,000 cashback for eligible refinancers. Apply by 30 September 2021. Terms and conditions apply.

Nano Variable Home Loans P&IHome≥ 25% Deposit Refi Only

Nano Variable Home Loans
  • App: $0
  • Ongoing: $0 p.a.
Switch to this competitive variable rate with zero fees. Requires a 25% deposit.

Suncorp Home Package Plus Fixed P&IHome 2Y Fixed≥ 20% Deposit

Suncorp Home Package Plus Fixed
  • App: $0
  • Ongoing: $0 p.a.
$3,000 refinance cash bonus
Lock in a low fixed rate for 2 years. Available with a 20% deposit. Eligible new borrowers can get the annual package fee reimbursed for the life of the loan. $3,000 refinance cash bonus for eligible borrowers. Other terms, conditions and eligibility criteria apply.