How fortnightly repayments could help you pay your mortgage off sooner
Here’s how making your home loan repayments fortnightly, instead of monthly, could help yo...
18 Nov, 2024
Mortgage repayment calculator
Home loan repayments are often the biggest drain on a homeowner’s monthly budget. For that reason, it’s imperative for would-be borrowers to calculate the size of their regular repayments before agreeing to take out a mortgage.
Whether you’re considering entering the market or starting a refinancing journey, our free Mortgage Repayments Calculator puts you in the driver’s seat.
Compare how different interest rates, loan terms, and repayment frequencies can impact the cost of your loan.
Your estimated results
Your estimate repayment
$2,061.11 monthly
Total principal paid
$450,000.00
Total interest paid
$291,998.05
Summary
$450,000.00
30 years
100.0 %
Principal & Interest
Monthly
$0.00
$450,000.00
$291,998.05
$2,061.11
monthly
monthly
Why should I use a mortgage repayment calculator?
Anyone considering taking out a new home loan or refinancing their existing one should take the time to calculate their potential mortgage repayments. Your Mortgage has just the tool to do so.
Our Mortgage Repayment Calculator can help you understand what your monthly, fortnightly, or weekly repayments could look like under various circumstances. It can also provide insight into the total cost of the loan over its full term.
Here's what such valuable information could mean for you:
First Home Buyers
It's easy for first home buyers to be overwhelmed with choices. The homebuying journey can involve visiting countless properties and speaking with dozens of professionals about your options. It can also come with the temptation to borrow more than originally planned in order to secure a more appealing property.
When assessing your home buying options, it's important to factor in the long-term impact that ongoing mortgage repayments can have on your bottom line.
Refinancers
Refinancing isn't always an easy decision. There are hundreds of mortgage products available, and the impact refinancing could have on your budget varies depending on the home loan you choose.
But don't let the seemingly endless array of choices distract you from the overall impact a particular mortgage can have on your budget.
Investors
As wise investors know, the difference between a good investment and a not-so-good one can come down to the finest details.
The investment home loan you use to buy a property can make or break your success.
When considering investment options, it's worthwhile calculating potential repayments and assessing how they might change over time.
Some of Australia's most competitive home loans
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market.
Important Information and Comparison Rate Warning
Important Information and Comparison Rate Warning
How does the mortgage repayment calculator work?
Your Mortgage's mortgage calculator considers several factors to determine how much your regular repayments will be over the term of a particular home loan.
It can also give you an estimate of how much interest could be paid over the life of the loan and the impact that extra or lump sum repayments could have on your long-term financial position.
Simply enter the amount you wish to borrow to buy a home, the interest rate on the table from your favourite lender, and your ideal loan term, as well as whether you wish to make principal and interest or interest only repayments, and you're on your way to knowing the value of your regular repayments.
You can even adjust the calculator to advise you on how the frequency of your repayments could impact them.
Though, the calculator has its limitations. Here are a few things it can't factor in:
-
Interest rate changes
-
The later decision to refinance
-
The use of redraw facilities or offset accounts
-
Changes in repayment types (from principal and interest to interest only, for instance)
How can I save money on my home loan repayments?
No one wants to spend more money on mortgage repayments than they need to.
Fortunately, there are plenty of ways you can save on your mortgage.
Find a lower interest rate
Getting the lowest possible interest rate is one of the easiest ways to save on your home loan.
If it's been a while since you've compared your interest rate against others in the market, you could be paying too much.
Here's how a lower interest rate can impact your repayments and overall interest bill, considering a $500,000 owner-occupier home loan with a 30-year term and principal and interest repayments.
| Interest Rate | Monthly Repayments | Total Interest Paid |
|---|---|---|
| 7% | $3,327 | $697,544 |
| 6.5% | $3,160 | $637,722 |
| 6% | $2,998 | $579,191 |
Make extra repayments
An easy way to pay your loan off faster is by making extra repayments.
If you pay more than the minimum every week, fortnight, or month, you Use our extra and lump sum repayment calculator to see how making extra repayments can reduce your loan amount.
The other way to make extra repayments into your loan is by using an offset account. An offset account is an everyday banking account that's linked to your home loan, where you can deposit your savings and your regular wages. Any money that's in your offset account is then 'offset' against your home loan balance, reducing the amount of interest you have to pay over the life of the loan.
Make more frequent repayments
Making more frequent repayments can also help you get ahead on your loan.
For example, there are 12 months in a year but 26 fortnights. If you make fortnightly repayments instead of monthly ones, you're making one extra month of repayments per year which puts you slightly ahead.
Not to mention, the interest charged on a home loan is often calculated daily based on the outstanding principal balance. Therefore, making more frequent repayments, such as weekly instead of monthly, can reduce the principal balance more often, resulting in paying less interest over time. However, not all banks calculate interest the same way, so making weekly repayments instead of monthly repayments may not actually save you any interest.
Save a bigger deposit
Putting down a bigger deposit can help to shrink your home loan repayments by reducing the amount you borrow. It can also improve your loan-to-value ratio (LVR), which could see you eligible for better home loan deals. However, simply bolstering their deposit isn't an option for many homebuyers.
Frequently Asked Questions
The easiest way to calculate your potential mortgage repayments is to use a Mortgage Repayment Calculator like the one above.
Most borrowers can expect their mortgage repayments to flex and shift over time. Our calculations are only accurate if every detail of your home loan remains unchanged for the duration of the loan term, which rarely happens. Chances are that your interest rate will fluctuate over the life of your loan, impacting your repayments. Additionally, extra or missed repayments, as well as the use of certain features such as offset accounts, can affect how much interest you pay overall.
Home loan repayments are made up of two parts: the principal (the borrowed funds being repaid) and interest charged on the principal. When you make principal and interest repayments, you’re both returning a portion of the borrowed funds and paying the interest accrued on those funds.
If you’re making interest-only repayments, you won’t be reducing the debt you hold. Instead, you’ll simply be paying the interest charged by your lender. Most lenders limit how long a person can be on interest-only repayments; otherwise, they might never see the lent money returned.
Over the life of your loan, your interest rate will likely fluctuate.
Factors driving it might include the cash rate, determined by the Reserve Bank of Australia (RBA), and your lender's discretion.
If your interest rate increases, so will your home loan repayments. Conversely, if your rate is cut, you’ll pay less. However, the portion of your repayments that goes towards your principal balance will remain unchanged.
Borrowers worried about changing interest rates might be tempted to fix their interest rate for a certain period, typically between one and five years.
If you've used the mortgage repayment calculator above, you might be wondering what an amortisation schedule is.
An amortisation schedule is a detailed table that shows the breakdown of mortgage repayments over the loan term.
It outlines how much of each repayment goes towards paying down the principal (the amount borrowed) and how much goes towards paying interest. The schedule helps borrowers understand how their loan balance decreases over time and how much interest they will pay throughout the life of the loan. This can be a useful tool for planning and managing your finances effectively.
Since 1995 we've been helping Australians learn about home ownership, compare home loans and get help from home loan specialists to find the right home loan for them.
© 2024 Savings.com.au Pty Ltd · AFSL and Australian Credit License Number 515843
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, InfoChoice.com.au, YourMortgage.com.au, YourInvestmentPropertyMag.com.au, and Performance Drive are part of the InfoChoice Group. In the interest of full disclosure, the InfoChoice Group is associated with the Firstmac Group. Read about how Infochoice Group manages potential conflicts of interest, along with how we get paid.
Savings.com.au Pty Ltd ACN 161 358 363 operates as an Australian Financial Services Licensee and an Australian Credit Licensee Number 515843. Savings.com.au is a general information provider and in giving you general product information, Savings.com.au is not making any suggestion or recommendation about any particular product and all market products may not be considered. If you decide to apply for a credit product listed on Savings.com.au, you will deal directly with a credit provider, and not with Savings.com.au. Rates and product information should be confirmed with the relevant credit provider. For more information, read Savings.com.au's Financial Services and Credit Guide (FSCG) The information provided constitutes information which is general in nature and has not taken into account any of your personal objectives, financial situation, or needs. Savings.com.au may receive a fee for products displayed.
