How are home loan repayments calculated?

Home loan repayments are calculated using the amortization formula, which factors in your loan amount, interest rate, and loan term. The formula ensures each payment covers both interest and principal, gradually reducing your loan balance to zero by the end of the term.

Should I choose weekly, fortnightly, or monthly repayments?

Fortnightly repayments are often the best choice. By paying half your monthly amount every two weeks, you make 26 half-payments (13 full payments) per year instead of 12. This can save you thousands in interest and years off your loan.

What is a comparison rate?

A comparison rate includes both the interest rate and most fees associated with the loan, giving you a more accurate picture of the true cost. Look for loans where the comparison rate is close to the advertised rate.

Can I pay off my home loan faster?

Yes! Make extra repayments when possible, switch to more frequent payment schedules, use an offset account, and round up your payments. Even small additional amounts can significantly reduce your loan term and total interest paid.

What happens if interest rates rise?

For variable rate loans, your repayments will increase when rates rise. A 0.25% rate increase on a $500,000 loan adds roughly $75 to your monthly repayment. Fixed rate loans protect you from rises during the fixed period.

§ Tool · tier 1 · independent

Repayment Calculator.

Calculate your home loan repayments with AI-powered market comparison

CalculatorFree, no signupOn-deviceupd February 2026

Inputs

Your numbers

Awaiting inputs

Move the sliders or type in the form on the left — the math updates live as you go. Click Get AI verdict when you want a written analysis.

Use our free home loan repayment calculator to see exactly how much your mortgage will cost. Plus, get AI-powered insights comparing your rate to current market rates and personalized tips to save money.

§ Worked examples

Real-world scenarios

First Home Buyer in Melbourne

Sarah is purchasing a $650,000 apartment with a 20% deposit ($130,000), borrowing $520,000 at 6.2% over 30 years.

Inputs

loanAmount:520,000interestRate:6.2loanTerm:30frequency:Monthly

Monthly repayments of $3,192. By switching to fortnightly ($1,596), Sarah could save $58,000 in interest and pay off 4 years earlier.

Upgrader in Sydney

James and Li are upgrading to a $1.2M home, using $300,000 equity plus savings. They're borrowing $800,000 at 6.5%.

Inputs

loanAmount:800,000interestRate:6.5loanTerm:30frequency:Monthly

Monthly repayments of $5,056. Adding $500/month extra to repayments could save them $180,000 in interest over the life of the loan.

§ FAQ

Questions Australians ask

§ Glossary

Plain-English definitions

Principal

The original loan amount you borrow, excluding interest. Your repayments gradually reduce the principal over time.

Interest

The cost of borrowing money, expressed as a percentage of the loan amount. Calculated on the remaining balance.

Amortization

The process of spreading loan repayments over time so each payment includes both principal and interest.

Comparison Rate

A rate that includes the interest rate plus most fees and charges, providing a truer cost of the loan.

Loan Term

The total time over which you repay the loan. Longer terms mean lower repayments but more total interest paid.

§ Pair it with

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Discover how much you could borrow based on your income, expenses, and existing debts.

See Extra Repayment Savings

Calculate how much you could save by making additional payments on your home loan.

How to use

01Enter your loan amount (the total you want to borrow)
02Input your interest rate (check your loan offer or current rate)
03Select your loan term (typically 25-30 years)
04Choose how often you want to make repayments
05Click calculate to see your results and AI insights

Key info

The average Australian mortgage is around $600,000
Current variable rates range from 5.8% to 7.5% (2026)
Fortnightly payments can save thousands over the loan term
Comparison rates include fees and give a truer cost

Pro tips

Switch to fortnightly payments to make the equivalent of 13 monthly payments per year instead of 12 - this can shave years off your loan
Always compare using the comparison rate, not just the headline rate - it includes most fees and charges
Consider an offset account if you have savings - money in offset reduces the interest you pay without locking it away
Round up your repayments to the nearest $50 or $100 for painless extra payments

Avoid these

Only comparing the advertised interest rate and ignoring fees, which can add significantly to your costs
Choosing a longer term for lower repayments without calculating the extra interest you'll pay over time
Not stress-testing your repayments at 2-3% higher rates to ensure you can handle future rate rises
Ignoring the power of extra repayments - even $50 extra per week can save tens of thousands

Disclaimer: Estimates only. Interest rates, fees and policies change frequently. Always verify with lenders directly. General information, not personal financial advice.

Last updated · February 2026