Mortgage repayment calculator

Repayments at today's typical rates

Monthly repayment and lifetime interest on a $600,000 loan over 30 years — and if your current rate sits at the top of this table, the refinance calculator prices the switch:

Repayments by loan size

A quick loan repayment calculator table — 5.9% over 30 years, from the same tested engine:

Wondering what a lender would actually let you borrow? That's a different question — the borrowing power calculator answers it with the 3% APRA buffer applied.

Where the money goes — the shape of amortisation

The repayment never changes, but what it buys does. The very first $3,558.82 on the $600,000 example is $2,950 of interest and only $608.82 of actual debt reduction — the bank gets paid first, and the loan barely moves. Each month the balance shrinks a little, so a little less interest accrues, so a little more of the same repayment lands on principal. The compounding of that tiny shift is the whole story of a mortgage: on this loan it takes until month 220 — 18 yrs 4 mos in — before even half your repayment is paying off the house rather than renting the money.

This is also why anything extra you pay early punches so far above its weight. A dollar of principal killed in year two stops compounding against you for nearly three decades — the extra repayment calculator and the offset calculator both run on exactly this mechanism.

Interest-only, quantified

Interest-only looks cheaper because it is — for a while. On the $600,000 example the IO repayment is just $2,950 a month ($609 less than principal-and-interest). But after a typical 5-year IO period you still owe the entire $600,000, now amortising over the remaining 25 years at $3,829.21 a month — $270 more than if you'd paid principal from day one. Total interest over the loan's life: about $725,764 against $681,175 — roughly $45,000 for the privilege of five cheap years. Investors do it anyway for tax and cash-flow reasons (interest is deductible on a rental, principal never is — see the negative gearing calculator); owner-occupiers rarely should.

The fortnightly trick, quantified

Genuine fortnightly amortisation saves almost nothing — the famous saving comes from a sleight of hand. Pay half your monthly repayment every fortnight and, because the year holds 26 fortnights but only 12 months, you quietly make thirteen months of repayments a year. On the $600,000 example that's equivalent to about $297 extra a month, which cuts 5 yrs 4 mos off the term and about $142,000 off the interest — from a change most budgets never feel. Any lender that lets you set your own repayment schedule lets you do this on day one.