You can use this calculator to work out your home loan repayments with different loan sizes, interest rates, loan terms and repayment options.
How Do I Calculate My Home Loan Repayments Using The Calculator?Simply enter your loan amount, loan term, interest rate and loan repayment type and you will see the results. You can toggle between monthly, fortnightly and weekly repayment frequency in the results section.
What Interest Rate Should I Use?You can use the Bank Standard Variable Rate (BSVR) of a major bank, less a 0.7 percentage point discount. As for other lenders, check their interest rates online or enquire with them and enter the interest rate accordingly. The discount varies from lender to lender. But you can assume 0.7 percentage points if you have not secured a lender or a mortgage broker to confirm anything yet. Keep in mind that our mortgage brokers may be able to get you a bigger discount on any standard interest rate. Suppose interest rates were to increase; to determine your home loan repayments, put in an interest rate about 3 percentage points higher than the current rate. This would help you figure out if you would be able to afford the loan if rates went up.
What Loan Term Should I Use?Generally, most mortgages in Australia are for a 30-year term. However, you can choose any term you like, even up to 40 years, which is the maximum term offered in Australia. You must still be aware that the shorter your term, the higher your repayments. And, the faster you pay off the loan, the less interest you will ultimately pay.
FAQs: Home Loan Repayment Calculator
The interest rate you repay on your home loan is set by your lender, and for the most part, the interest rate your lender sets is influenced by the cash rate decision made by the Reserve Bank of Australia.
The higher the interest rate, the higher your home loan repayment. That’s why when the cash rate rises, the repayments on your home loan could also increase.
Yes, you can pay your home loan early. Paying off your home loan early might seem like a good plan, especially if it means you won’t have debt looming for the long term.
However, some lenders might penalise you for paying off your home loan early, and there will be some fees involved.There might be some benefits to keeping your home loan account open:
- You can access the equity for other purposes.
- You can roll over your debts into your home loan.
- Interest repayments for rental properties are tax deductible.
Yes, you can pause your home loan repayments.
Pausing your home loan repayments is also called taking a repayment holiday. If you’re going through financial or personal hardships that are making it difficult to make your repayments when they’re due, you can ask for a repayment holiday from your lender.
Despite what you might have heard in the media, there isn’t necessarily a benefit to paying weekly or fortnightly instead of making monthly repayments. Some lenders divide the monthly repayment by two to determine how much you would pay if you were to make fortnightly repayments for your mortgage.
This will lead you to pay more than the true fortnightly repayments. However, if you make extra repayments then you will pay the loan off even faster and will save more money. Thus, paying fortnightly appears to give you a benefit.
Making monthly repayments and paying more than the minimum is the most effective way to save money on your mortgage. Combining this with an offset account, you can easily reduce your interest expense without making a noticeable change to your lifestyle.
If you are making interest-only repayments, then you are not actually paying off your home loan. You are just paying the monthly interest to your lender.
The only advantage is that you get to make smaller payments for a while. The disadvantage is that you will not actually be paying off your loan and ultimately you will pay much more in interest.
Investors often use interest-only loans on their investment properties to keep their monthly commitments low and to allow them to use their spare funds to pay off their non-tax deductible debts first. Owner-occupiers often use them during times of financial stress.
First, determine how much you would feel comfortable repaying each month, then use a rate 3 percentage points higher than the current BSVR. This method can help you work out how much you can comfortably borrow without changing your lifestyle or current spending habits.
This is a simplified method of working out your borrowing capacity. However, you can also use our borrowing power calculator, or our mortgage brokers can give you a more exact figure using our software.
We never recommend that you borrow to your limit, as this leaves you very little surplus money to spend on holidays or to keep on standby for unforeseen circumstances.
A few important things shape how much you have to pay each month for a $500,000 house. These include the interest rate, how long you’ll be paying off the loan, and the deposit you paid.
Let’s say you saved 20% of the house price as a deposit. That’s $100,000, which means you’d need to borrow $400,000.
Using our home loan repayment calculator to figure it all out, given that you have 30 years to pay back the loan and the interest rate is 5.58%, your monthly payment would be around $1929.13. This is the amount you’d need to pay every month to cover the loan for the house.
Let’s say that your interest rate is 5.58%.Using our home loan repayment calculator, the monthly repayment for a $700,000 mortgage with a 30-year term is $4009.73.
A common rule of thumb is that your mortgage repayments should not exceed 30% of your gross monthly income. This should ensure that you have enough funds left over for other essential expenses and savings. If it exceeds 30%, the borrower could be under mortgage stress.
Let’s consider an example: If your gross monthly income is $6,000, a mortgage payment of $1,800 is within the recommended range. However, this is just a general guideline, and your individual circumstances may vary.
- Refinance to a lower interest rate or extend the loan term.
- Make extra payments.
- Use an offset account.
- Switch to interest-only payments.
- Explore government grants.
- Cut unnecessary expenses.
- Rent out a room for extra funds.
At Home Loan Experts, we care about helping you avoid mortgage stress and service your loan for its full term. The best way to reduce your home loan repayments will depend on your individual circumstances. Consider your budget, your financial goals, and the interest rates available to you before choosing a method. We’re equipped to compare rates and fees on your behalf. We’ll also guide you through the application process, ensuring a smooth and informed path towards lowering your home loan repayments. Call us at 1300 889 743 or complete our free online assessment form to get started.
- Higher Interest Rates: When interest rates rise, the cost of borrowing increases. This translates to higher mortgage repayments, as a larger portion of your payment goes towards interest. As a result, your overall repayment amount over the loan term rises.
- Lower Interest Rates: Conversely, lower interest rates lead to reduced borrowing costs. With a smaller interest portion, a larger part of your repayment goes towards paying off the principal, potentially shortening the loan term and decreasing the overall repayment amount.
Borrowers with fixed-rate mortgages are protected from interest-rate changes for the duration of their loan term. However, if you choose to refinance your mortgage before the end of your loan term, you may be subject to new interest rates.
We’re Here To HelpThe home loan repayment calculator is a helpful tool for estimating your mortgage payments, but it’s important to keep in mind that the results are based on certain assumptions and may not reflect the exact terms of your loan. That’s where the expertise of a mortgage broker comes in. At Home Loan Experts, we can help you get the right interest rate for your situation from the wide range of lenders on our panel. We will do all the legwork of finding and applying for a home loan. Call us on 1300 889 743 or enquire online for free today.
- The home loan repayment calculator is a helpful tool for estimating mortgage payments.
- Keep in mind that the results are based on certain assumptions, so they may not reflect the exact terms of your loan.
The results from this calculator should be used as a guide only.They do not constitute a loan approval, quote or an offer to lend. The calculator is not to be relied on for making a final decision on a financial product.
Code errors or delays with updating the calculator may cause your result to be inaccurate.
You should obtain a formal approval from a lender before making any offer on a property or any financial decision that relies on a new mortgage.