Loan RepaymentCalculator

How this loan repayment calculator works

This loan repayment calculator estimates your regular repayments based on the loan amount, interest rate, repayment frequency and loan term you enter. It's useful whether you're comparing different home loan offers, testing rate rises, or planning your budget before you buy or refinance in Sydney, the Hills District or anywhere in NSW.

The calculator assumes a standard principal-and-interest home loan unless you choose interest-only. In real life, lenders may have minimum repayments, rate discounts, package fees and different repayment options. A mortgage broker can help you compare banks and non-bank lenders side by side — not just on interest rate, but on total cost over time.

• Quickly estimate your monthly, fortnightly or weekly repayments
• See how interest rate changes affect your repayments and total interest
• Compare different loan terms, e.g. 25 years vs 30 years
• Test principal-and-interest vs interest-only repayment options

Principal & interest vs interest-only: what's the difference?

With a principal and interest (P&I) loan, each repayment covers both the interest charged and a portion of the loan balance. Over time, the balance reduces, less interest accrues, and more of each repayment chips away at the debt. P&I is the default structure for most owner-occupier home loans in Australia and results in the lowest total cost over the life of the loan.

With an interest-only (IO) loan, repayments only cover the interest — the loan balance stays the same throughout the IO period (typically 1–5 years). Monthly repayments are lower during this phase, but when the IO period ends, repayments jump to cover both principal and interest over a shorter remaining term. IO loans are commonly used by property investors for cash flow reasons, as the interest may be tax-deductible. Most lenders charge a slightly higher rate for IO loans.

Use the calculator above to compare both structures with your loan amount and rate to see the repayment difference and total interest cost.

How extra repayments save you money

Every dollar you pay above the minimum repayment directly reduces your loan balance. Because interest on a home loan is calculated on the outstanding balance, a lower balance means less interest accrues each month — and that saving compounds over the remaining loan term.

On a $600,000 loan at 6% over 30 years, the minimum monthly repayment is around $3,597. If you add just $500 per month on top of that, you could save over $120,000 in total interest and pay off the loan more than 7 years early. The earlier you start making extra repayments, the greater the effect — because the interest saving in year 2 also reduces the interest in years 3, 4, 5 and beyond.

A home loan offset account works similarly — funds sitting in the offset reduce the balance on which interest is calculated, giving you the same interest-saving benefit while keeping your money accessible.

• Extra repayments reduce your loan balance and interest immediately
• Even small amounts — $100–$200/month — create material savings over 25–30 years
• Lump-sum repayments (e.g. tax refunds, bonuses) have an outsized effect early in the loan
• Check whether your loan allows extra repayments without fees — fixed-rate loans often have caps

What happens if interest rates rise?

On a variable rate loan, your repayments change each time your lender adjusts the rate — usually following RBA cash rate decisions. A 0.5% rate rise on a $600,000 loan adds approximately $180–$200 per month to minimum repayments. A full 1% increase adds around $360–$400 per month.

This is why APRA requires lenders to stress-test your repayments at your contract rate plus a 3% serviceability buffer before approving a loan. The buffer is designed to ensure borrowers can absorb rate increases without defaulting. If you were approved at 6%, you were tested at 9%.

If you're concerned about rate volatility, a strategy call with a broker can help you weigh fixed vs variable options and find a loan structure that fits your risk tolerance and financial goals.

How to reduce your home loan repayments

If the repayments shown are higher than you're comfortable with, there may be ways to bring them down or make them more manageable:

• Refinancing to a lower interest rate or sharper product
• Extending your loan term to spread repayments over a longer period
• Using an offset account or making extra repayments when cash flow allows
• Consolidating higher-interest debts into your home loan (with advice)

The right strategy depends on your goals, risk tolerance and timeframe. We can walk you through different repayment scenarios — including what happens if rates move — and help you choose a structure that suits your situation.

Loan repayment calculator FAQs