Home Loan Repayment Calculator in Australia

Trying to compare home loan repayments is a tricky business. It can be difficult seeing which loan is truly the cheapest when you have different deposits, interest rates, and fees on each one. A repayment calculator is the perfect tool for understanding what you’ll actually be paying on your prospective home loan.

How do I use the home loan rate comparison calculator?

The calculator will ask you for all the key details of the loan you’re considering. These include:

  • Home purchase price

    This is the original price of the property you are purchasing. Loan interest, taxes, and insurance are based around it, so a lower purchase price saves money many times over.

  • Initial deposit

    This is the amount of money you’ve saved up to lock down the purchase with a large initial payment. The greater the deposit, the smaller the loan you will need for the remainder.

  • Interest rate

    This determines how much interest will accrue on your loan. With a variable interest rate, the calculator can only give an estimate of your cost based on the current rate.

  • Loan term

    This is how long you’ll be paying the loan back. Longer terms have a smaller payment each month, but you’ll likely pay more in interest overall. Shorter terms are the reverse.

  • Establishment fee

    This is an extra fee for the creation of the loan by the lender. Although seen as an upfront cost, it is often added to the loan amount and spread out across your payments.

  • Repayment schedule

    This is how frequent your payments are. While monthly payments are often the default option, some borrowers choose fortnightly or weekly to match their pay schedule.

With all of these factors in place, the calculator can give you multiple important pieces of information. You’ll learn the amount you would owe on each repayment, and you’ll also see how much money you’d pay on the loan overall. The calculator is therefore highly useful for making an informed home loan repayment comparison.

How does the home loan repayment calculator get the result?

Our calculator uses the same formula that lenders use. Your initial deposit is subtracted from the purchase price to see how much money the loan needs to cover. This is the loan principal amount.

The calculator will then work out the dollar amount of interest owed based on that principal. Finally, the calculator spreads out the principal & interest repayments over the loan term, taking into account your payment frequency. This lets you see what your regular repayment cost will become.

How do I make room in my budget for home loan repayments?

You don’t want to get pressured into taking on a bigger monthly payment than you can afford, which is why getting an estimate from a loan calculator is so critical. You also don’t want to end up paying back thousands of extra dollars in interest if you can avoid it. These are some ways to save money long-term without breaking the bank on any given month:

  • Make extra repayments
    If you can, pay a little extra towards the loan. This puts you ahead of schedule, which saves on interest and creates breathing room down the line. Even a one-time lump sum payment can be a big help.
  • Change your repayment frequency
    Your loan should work for you and be suited to your needs. Many borrowers set up their repayment schedule to match how often they get paid. This makes it easier to budget and plan ahead.
  • Use an offset account
    This is a transaction account linked to your home loan. Whatever sum is in your account gets offset from the loan balance. Interest is only charged on the difference instead of the entire loan total, which cuts costs.

Home loan calculator FAQ

What are the costs included in my mortgage payment?
The biggest expenses will be repayments on your principal loan amount and any related interest. You might also be paying for LMI if your deposit was less than 20%.
How is interest calculated on a home loan?
Interest is how the lender earns money on the loan. It’s calculated as a portion of your overall loan and gets spread out over all of your regular repayments.
Can my monthly loan repayment amounts go up?
Yes, if you have a variable interest rate that fluctuates with the market, your monthly repayment could go up. Changes to your loan conditions can also affect the payments.

Home loan calculator conclusion

Home loans come in many shapes and sizes, and it can be a challenge getting one that’s right for you. Each lender’s offer will look a little different, and you want to make sure that you’re borrowing an amount that you can afford. Using a calculator to compare home loan repayments makes it easy to find the best deal.