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Home Loan Repayment Calculator

Use our free online home loan repayment calculator to calculate the cost of your mortgage repayments.

How do home loan repayments work?

When you take on a home loan to purchase a house, you’ll need to repay the original amount you borrowed, plus interest. Naturally, your ability to repay this whole amount owed at once is unlikely, so it is split into more manageable home loan repayments.

You will have the option to make these repayments either weekly, fortnightly, or monthly throughout the agreed-upon term (usually 25 to 30 years) to ensure that your loan is fully paid off within that period. At first, more of your repayment will go towards the cost of interest, with a smaller part reducing the principal. As the loan progresses, the interest portion decreases, and the principal reduction increases.

How are my home loan repayment amounts calculated?

To figure out how much their home loan repayments are calculated, you’ll need to look at the principal amount, interest rate, duration, and loan category, among other things. To estimate your mortgage payments, you can enter these factors into the repayment calculator above and then compare the results over different repayment periods like weeks, fortnights, or months.

Which repayment frequency is better, monthly, fortnightly, or weekly?

Choosing how frequently to make your home loan repayments is a matter of personal preference and financial circumstances — there is no “best” option.

There is a difference in overall interest savings between monthly, fortnightly, and weekly repayments, but the amount saved is minimal. The key to deciding how often you should make repayments is consistency. You should choose the frequency that aligns with your income and helps you maintain a consistent repayment pattern. Feel free to use our mortgage repayment calculator above to compare the impact of different frequencies based on your loan details.

Do I have the option to make extra repayments on my home loan?

Yes, many home loans offer the option to make extra repayments — payments made in addition to your regular scheduled repayments. By making them, borrowers can repay their loans sooner and reduce the overall cost of interest they'll pay over the term of the loan. Some situations where you can consider making extra repayments are when you have surplus funds, a bonus, or an increase in income.

However, we advise checking your loan agreement for any restrictions or limits on extra repayments. Some loans have strict limits on how much you can repay beyond the regular repayment amount, while fixed-rate loans may result in break fees for early repayments.

What are the differences between “principal and interest” and “interest-only” repayments?

Principal and interest repayments and interest-only repayments are two different types of repayment structures for loans:

  • Principal and Interest Repayments:

  • In principal and interest repayments, each payment covers both the principal (the amount you borrowed) and the interest (the cost of borrowing). As you make payments, the outstanding loan balance gradually decreases. Over time, the interest portion of the repayment decreases while the principal repayment portion increases. Through this repayment structure, the loan is successfully paid off by the end of the loan term.

  • Interest-Only Repayments:

  • With interest-only repayments, you only pay the interest cost of the loan. This means that the principal amount remains unchanged throughout the interest-only period, typically ranging from 1 to 5 years. While your initial payments are lower, you don't reduce the loan balance. After the interest-only period, you transition to principal and interest repayments or need to repay the remaining principal in full. Interest-only repayments can be useful when you are short on funds or for investment purposes, but will eventually result in higher overall interest costs over the life of the loan.

Choosing between these options depends on your financial goals and circumstances. Principal and interest repayments build equity and reduce your loan balance, while interest-only repayments provide short-term relief but require careful planning for the principal repayment phase.

Is it possible to change my repayment amount during loan term?

You may be able to change your repayment amount during your loan term, although this is subject to your lender's policies. Lenders often allow you to increase or decrease your repayments based on your financial circumstances in the case of variable-rate loans. This flexibility can help you pay off the loan faster or manage temporary cash flow challenges.

However, fixed-rate loans might have restrictions on changing repayments due to the predetermined interest rate. It's crucial to review your loan agreement and discuss it with your lender to understand their policies, potential fees, and the process for adjusting repayments.

What happens if I miss a repayment on my mortgage?

Missing a mortgage repayment can have serious consequences. You might incur a late repayment fee, negatively affect your credit score, and interest continues to accumulate on the outstanding balance.

Missing out on repayments repeatedly could lead to legal action, foreclosure, or property sale to recover the debt. You should communicate with your lender if you foresee difficulties in making a repayment. Many lenders offer assistance programs to help borrowers facing financial hardships, providing options to manage the situation and avoid severe consequences.

What's the difference between a fixed repayment and a minimum repayment?

A fixed repayment is a consistent payment amount that you choose to make towards your loan, usually higher than the minimum required. It helps pay off the loan faster and reduces the overall interest paid.

A minimum repayment, on the other hand, is the lowest amount you're required to pay according to your loan agreement. Making only the minimum repayment extends the loan term and increases the total interest paid.

Opting for fixed repayments can accelerate loan repayment and save money, while minimum repayments offer short-term relief but lead to higher overall costs.