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Mortgage calculator
Are you buying a house, refinancing your existing home loan, or just trying to get a picture of how your monthly mortgage repayments? You might even be curious about how much interest you might end up paying over the lifetime of your home loan.
Whatever the reason, our mortgage calculator (or home loan repayment calculator) might help you get a picture of how your mortgage could look in years to come.
Home loan repayments calculator
The calculator will appear below.
To use this online home loan calculator, enter your:
- expected loan amount
- interest rate
- home loan term
- payment frequency and
- choose a loan type of either principal and interest or interest only.
The calculator will show estimated monthly repayments based on the information that you have entered, as well as the total estimated amount of interest that you would pay should you reach the end of your loan term (and the interest rate remains the same).
You can display these results as a graph or a table, showing your total loan cost, as well as how long it will take to pay off the principal (if you choose this type of loan).
Please note: The calculations do not take into account any fees you may be charged. The results provided by this calculator are an estimate only, and should not be relied on for the purpose of making a decision in relation to a loan. Interest rates and other costs can change over time, affecting the total cost of the loan. Consider whether you need financial advice from a qualified adviser.
How do you use a mortgage repayment calculator?
A home loan calculator or mortgage payment calculator can be a handy tool when trying to estimate how much you will need to pay each month to cover your mortgage. While it’s important to keep in mind that the information provided by one of these calculators is only a general estimate, here’s you you might find it useful in a number of different scenarios:
Buying a house
If you are trying to decide how much you might be able to afford to borrow, you could use a mortgage calculator to work out how much your monthly repayments could be on different loan amounts. This could also help you to decide what type of property you can afford to buy, and where.
If you already have a household budget sorted, know how much you can spend each month on a mortgage and know how much you want to borrow, this calculator could help you decide what loan conditions might suit your circumstances. As a hypothetical example, if one lender was offering an attractive interest rate but on a longer-term loan, you could use the calculator to work out if that was a better deal than another lender offering the same interest rate but a shorter term.
Refinancing an existing mortgage
Home loan interest rates are regularly changing, so it could pay to shop around to find the best deal. One way to check if a new loan would help you to save compared to your current one could be to use a mortgage payment calculator. You could use it to enter the rates, term and amount of your current home loan, and then note down the result. Then, you could compare rates (such as via Canstar’s home loan comparison tables), and enter the details of your preferred alternative home loan offering, and compare the results. It’s good to keep in mind that the calculator will only give an estimate of repayments on the interest rate stated, and does not take into account fees or changes in interest rates over time.
You could also work out what the difference might be to the total interest you pay and your monthly repayments if you altered the term of the loan. This could help you to plan your financial future.
If you were considering swapping from a principal and interest home loan to an interest-only mortgage, or vice versa, a loan calculator could help you see what difference this could make to your monthly repayments. It’s important to note the difference between the two types of loans before signing on the dotted line.
Wanting to change your home loan repayment frequency
If you are wondering what changing the frequency of repayments might do to your total loan balance over time, a mortgage calculator could help you to work this out.
Frequently asked questions
How do you calculate mortgage repayments?
Calculating mortgage repayments can either be done via a home loan calculator, like the one above, manually via an equation, or via a spreadsheet program. Either way, you will need to know what your principal is (how much you will be borrowing), the interest rate, and the term (length) of your loan. Equations of this kind will only produce an estimate of your repayments, as they are not able to consider the full picture, such as possible interest rate changes over time.
How is interest calculated on a home loan?
Interest on a home loan is generally calculated on a daily basis on the outstanding balance of the loan. How much interest you end up paying on your loan will depend on a range of factors. The calculation typically involves multiplying your loan balance by your interest rate and dividing this by 365 days (some lenders divide by 366 days during leap years). This is your daily interest charge. This is then usually multiplied by the number of days in the month to work out your monthly interest amount, assuming you make your repayments monthly.
Explore further: How Is Interest Calculated On a Home Loan?
How is mortgage principal and interest calculated?
Canstar’s mortgage repayments calculator, above, can give a rough visual reference of how a principal and interest loan works. In a ‘principal and interest’ loan, the ‘principal’ part of a loan is the amount borrowed. ‘Interest’ is how much money (excluding fees) the lender charges the borrower to have that loan and repay it back over time. When you opt for a ‘principal and interest’ loan, you are entering into an agreement with the lender whereby you are paying off both the amount borrowed and the interest charged simultaneously. Over time as you make your repayments, the ‘principal’ part of the loan will begin to get smaller, which, in turn, means the amount of interest you pay is theoretically reduced, too.
With a home loan, the lender charges interest based on an annual percentage rate. Using that rate, interest is typically calculated each day on the loan’s current balance and the interest amount is divided by 365 to give the daily interest amount. As interest is usually charged monthly, the daily interest amounts for the month are added together and that total is added to your loan balance. At the start of a loan, typically a higher proportion of your repayments goes towards interest, so the principal reduces more slowly than when nearing the end of the loan.
Learn more: Principal and interest home loans – what exactly are they?
How can I pay off my home loan sooner?
There are several strategies you could use to pay off your home loan sooner. If you are on a fixed rate, your bank or lender may allow you to make extra repayments up to a certain threshold each year – it may be worth checking with them to see if this is possible for you. If your fixed rate home loan term is coming to an end, you might consider refinancing to another fixed rate loan product that allows this.
As an alternative, you might consider switching to a variable rate home loan that has an offset account linked. An offset account works like a transaction account, but the money in it will literally offset the balance of your home loan, lowering the amount of interest you’ll have to pay. A home loan calculator could help you get a picture of how much you might be able to save in interest with an offset account.
What home loan rates are available?
Home loans can offer a variable or fixed interest rate, or you may be able to split your loan so a portion of your loan has a fixed rate and the rest has a variable rate. With fixed rate home loans, your interest rate is locked in for a certain period of time (usually one to five years). With variable rate home loans, your interest rate can rise or fall throughout your loan term, depending on a number of factors such as the Reserve Bank’s official cash rate.
Your home loan interest rate can make a big difference to the total amount of interest you pay, with the size of your home loan being another key factor.
What are the different types of home loan repayments?
When you are paying off a home loan, you may opt for principal and interest repayments, or interest only repayments. Principal and interest is the most common repayment type, and means that you will pay off both the balance owing on your home loan (the principal) as well as the associated interest and fees. As the balance of your home loan gets lower over time, the amount you’ll repay in interest could likewise get smaller.
Interest only home loans, on the other hand, will see you paying only the interest and fees you owe, and not paying anything off the balance. Many banks or lenders will allow you to structure your home loan so that you are making interest only repayments for a period of one to five years. While this may be a strategy to save on repayments in the short term, it may mean that you’ll take longer to repay the balance of your home loan, and pay a lot more in interest than if you had been making principal and interest repayments all along.
Explore: What are the current interest rates on home loans?
How much do I need for a home deposit?
A deposit is a percentage of the purchase price or value of the home you hope to buy and is money you typically need to save upfront. Before you can work out how much deposit you need – or if the savings you have already are enough – it’s a good idea to work out how much you can actually borrow. Then it’s a matter of working out how much of a deposit you would need to have saved, if you were to take on a home loan to buy a property in your desired location. Bear in mind that you may need to pay for lenders mortgage insurance if your deposit is smaller than 20% of the property’s value.
Explore: How much do you really need for a home loan deposit?
Does my credit score count when applying for a home loan?
If you are applying for a loan, or thinking of refinancing, one thing to consider could be checking on your credit score.
Check your credit score for free
Your income, occupation and age are all factors that could potentially affect your ability to secure a home loan. However, your credit score can also be an important factor your lender may take into consideration when evaluating your loan application. For this reason, it may be a good idea to refresh your knowledge of what your current credit score is, and think about whether you could be doing more to maintain or improve it.
Explore: How does my credit score affect my ability to get a home loan?
How long to pay off my mortgage with extra payments: Calculator
Making extra payments into your mortgage could help to pay it off faster, as it could cut down the time it takes to pay off the loan and potentially save you on interest in the long run. However, some lenders have caps on how much you can pay back in a specified time frame, particularly when it comes to fixed-rate loans, so it is a good idea to discuss this with your lender. If you are considering ways to speed up the repayment of your loan, you may consider using Canstar’s Extra Home Loan Repayments Calculator.
It may also be a good idea to explore whether or not having an offset account or redraw facility attached to your loan could help you to speed up your loan repayment.
Explore: 5 ways to pay off your mortgage faster
What other home loan calculators could I use?
Canstar has a range of other calculators available that could help you to plan your finances.
If you are buying a home and want an estimate of how much you might be able to borrow, you could try the Home Loan Borrowing Power Calculator.
Canstar’s Stamp Duty Calculator may help you to work out how much tax you may be required to pay if you plan on buying a home, depending on the purchase price of the property, where it is located and your circumstances.
If you are weighing up a couple of different home loan options, the Home Loan Comparison Calculator may help.
Home Loan Comparison Calculator
Finally, you may be considering a split loan – which is where part of the loan is set for repayments on a fixed-rate basis, and the rest is on a variable rate. In this case, our Split Loan Calculator may be of assistance.
This content was reviewed by Senior Finance Journalist Alasdair Duncan prior to publication as part of our fact-checking process.
Author: Nina Rinella
As Canstar’s Editor-in-Chief, Nina heads up a team of talented journalists committed to helping empower consumers to take greater control of their finances. Nina has written countless articles about finance and has been interviewed on finance topics by media organisations including The Australian, Realestate.com.au, Domain, the Herald Sun and the Sydney Morning Herald. Previously Nina founded her own agency where she provided content and communications support to clients around Australia for 8 years. She also spent four years as the PR Manager for American Express Australia, and has worked at a Brisbane communications agency where she supported dozens of clients, including Sunsuper and Suncorp. When she’s not dreaming up ways to put a fresh spin on finance, she’s taking her own advice by trying to pay her house off as quickly as possible and raising two money-savvy kids. Nina has a Bachelor of Journalism and a Bachelor of Arts with a double major in English Literature from the University of Queensland. She’s also an experienced presenter, and has hosted numerous events and YouTube series. You can follow her on LinkedIn, Instagram or Twitter and Canstar on Facebook. Meet the Canstar Editorial Team. Have a media enquiry, and interested in featuring Nina as a financial expert and commentator? Contact Canstar’s Media Team today.