Want to save tens of thousands in interest costs on your mortgage? Try our lump sum repayment calculator to find out how. Enter your current loan details, then see how much you could save by making a lump sum payment. To help with your forward planning, you can also choose when you make the lump sum repayment.

Please Note: The calculations do not take into account all fees and charges. 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. Interest rates and other costs can change over time, affecting the total cost of the loan. Your loan contract may not permit lump sum repayments.


What is a lump sum repayment?

A lump sum is a type of extra repayment made after the establishment of the loan, and is paid at the same time as you continue to make your regular monthly repayments.

You can do any number of calculations about lump sum repayments you could make on a home loan with the CANSTAR Lump Sum Calculator. Read on to find out how your loan term and the interest you pay are affected by making lump sum repayments of different sizes.

How we made our calculations

The calculations we’ve made are based on inputting the following data into our calculator, except where we have specified otherwise.

  • Loan Amount: $350,000
  • Repayment Frequency: Monthly
  • Interest Rate: 89% (average standard variable interest rate on our database at time of writing)
  • Loan Term: 25 years
  • Lump sum: $1,000

According to Canstar’s comprehensive research database, the majority of Australians (60%) are looking for a loan amount of between $350,000 and $749,000 – so we’ve based our home loan calculations for this article on a loan of $350,000. You can enter the specific loan amount you are looking for in our home loan calculators and our comparison of home loans on the market.

Make sure you check whether the features of a home loan include the facility to make lump sum repayments, before signing up for the long haul.

When to make a lump sum repayment

The short answer is that making a lump sum repayment as early as possible into the life of your loan will make the greatest difference to reducing the interest you pay on your loan.

The longer answer is that it is most helpful to make a lump sum repayment when you can afford to without injuring your emergency savings, and when your financial institution will not charge you a fee to do so.

The following table uses a lump sum of $1,000. Making a lump sum payment 5 years into your loan could save you $5,000 more in interest than making a lump sum payment after 10 years. Please note that this assumes that you continue making the same monthly repayment!

Home loan calculators to help you work out your financial position

Use Canstar’s home loan calculators when you’re doing your sums about how much you can afford to borrow in a home loan:

Written by TJ Ryan