How much would repayments on a $1 million mortgage cost each month?
The cost of the monthly repayments on your $1 million home loan will vary depending on your loan’s interest rate, repayment type (principal and interest or interest only), and loan term.
You can use the comparison table at the top of this page to see estimated monthly repayments based on the current interest rates for $1,000,000 variable rate home loans from our online partners.
Can I afford repayments on a $1 million mortgage?
If you’re looking for a $1,000,000 mortgage, your repayments are likely to be several thousand dollars per month, considerably higher than the repayments on, say, a $200,000 mortgage.
When borrowing any amount, your lender will need to ensure you can afford to comfortably repay the loan.
When working out if you can afford a mortgage, it will likely look at your debt-to-income (DTI) ratio. This ratio is calculated by dividing the value of any debts you already have, like a credit card or personal loan balance, as well as your projected new debt, against your income. You’ll also need to show that you'll have enough of your income left over after meeting your existing expenses to comfortably afford the repayments.
To help you get a better understanding of what the monthly repayments may be like for a $1 million mortgage, we’ve created a table below showing monthly repayments over a 20-, 25-, and 30-year period at varying interest rates using Canstar’s mortgage calculator (figures don't include any fees which may be added to the loan.)
Interest rate (p.a.) | Loan term | ||
|---|---|---|---|
20 years | 25 years | 30 years | |
4% | $6,060 | $5,278 | $4,774 |
5% | $6,600 | $5,846 | $5,368 |
5.50% | $6,879 | $6,141 | $5,678 |
6% | $7,164 | $6,443 | $5,996 |
6.50% | $7,456 | $6,752 | $6,321 |
7% | $7,753 | $7,068 | $6,653 |
7.50% | $8,056 | $7,390 | $6,992 |
Source: These figures were generated using Canstar’s mortgage calculator, assuming a $1,000,000 owner-occupier principal & interest home loan (excluding fees and charges).
Can I refinance my $1 million mortgage?
It's generally possible to refinance a $1 million home loan, depending on your needs and if you meet the new lenders’ approval criteria. If you have a loan-to-value ratio (LVR) of more than 80%, you might still be able to refinance, but you may have to pay LMI, which can run into tens of thousands of dollars.
What are the benefits of refinancing a $1 million mortgage?
Refinancing could get you a better interest rate on your loan, which could lower your monthly repayments, as well as your interest costs over the long run.
You may also decide to change the conditions of your loan, like extending your loan term, which could cut your monthly repayments (but also extend the overall cost of the loan). Or, you may decide you need a loan with different features, like an offset account, which could help reduce the amount of interest you're charged and potentially help you repay the loan faster.
What are the drawbacks of refinancing a $1 million mortgage?
There are potential costs involved with refinancing. These can include fees to discharge your old loan and establishment fees to set up your new one. If you’re wanting to refinance during a fixed rate term, you may also incur break fees.
What could my LVR be with a $1 million mortgage?
One thing you may need when comparing mortgage options is your LVR. This is the amount you need to borrow compared to the value of the property, expressed as a percentage.
The table below shows what your LVR might be if you were to borrow $1 million, based on your property's value and how much of a deposit or equity you're bringing to the party.
It should also be noted that, if you're borrowing with an LVR of more than 80%, you might be charged a lenders mortgage insurance (LMI) premium.
Deposit/equity | Potential property value | LVR |
|---|---|---|
$660,000 | $1,660,000 | 60% |
$425,000 | $1,425,000 | 70% |
$250,000 | $1,250,000 | 80% |
$175,000 | $1,175,000 | 85% |
$110,000 | $1,110,000 | 90% |
$50,000 | $1,050,000 | 95% |
