Mortgage Calculator – Home Loan Repayment Calculator

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How to use a mortgage calculator?

Mortgage calculators and home loan repayment calculators can be handy tools to use when trying to estimate how much you’ll need to pay each month to cover your mortgage.

Keeping in mind that these types of calculators usually only give general estimates, here’s how they can be used in different scenarios:

If you’re trying to figure out how much you could afford to borrow, you can use a mortgage calculator to figure out your monthly repayment amount for different loan amounts. It could also help you decide what type of property you can afford to buy and where.

If you’ve already budgeted for your household, know how much you can spend each month on a mortgage, and how much you want to borrow, this calculator might help you decide what loan terms might be right for you. As a hypothetical example, if one lender offered an attractive interest rate but on a longer term loan, you could use the calculator to determine if it was a better deal than another lender offering the same rate. ‘interest but a shorter duration.

  • Refinance an existing mortgage

Interest rates on home loans change regularly, so it can be worth shopping around for the best deal. One way to check if a new loan would help you save money compared to your current loan might be to use a mortgage calculator. You can use it to enter the rates, term, and amount of your current home loan, and then write down the result. Then you can compare rates (like via Canstar’s home loan comparison charts), enter the details of your preferred alternative home loan offer, and compare the results. It is good to keep in mind that the calculator will only give an estimate of repayments on the indicated interest rate, and does not take into account any fees or interest rate changes over time.

You can also determine the difference between the total interest you pay and your monthly repayments if you change the term of the loan. It could help you plan for your financial future.

If you’re considering going from an interest-only home loan to an interest-only mortgage, or vice versa, a loan calculator could help you see what a difference it could make on your monthly payments. It is important to note the difference between the two types of loans before signing on the dotted line.

  • You want to change the repayment frequency of your mortgage

If you’re wondering what changing your repayment frequency might have on your total loan balance over time, a mortgage calculator might help you solve this problem.


Frequently Asked Questions

How to calculate mortgage payments?

Calculating mortgage payments can be done either through a calculator, like the one above, manually through an equation, or through a spreadsheet. Either way, you will need to know your principal (how much you are going to borrow), the interest rate, and the term (duration) of your loan. Equations like this will only produce an estimate of your repayments because they aren’t able to take into account the full picture, such as possible changes in interest rates over time.

How are the interest on a mortgage calculated?

Interest on a home loan is usually calculated daily on the outstanding loan balance. The amount of interest you end up paying on your loan will depend on several factors. The calculation usually involves multiplying your loan balance by your interest rate and dividing it by 365 days (some lenders divide by 366 days in leap years). This is your daily interest charge. This amount is then usually multiplied by the number of days in the month to calculate your monthly interest amount, assuming you make your monthly payments.

Explore Further: How Is Interest Calculated On A Home Loan?

How are principal and mortgage interest calculated?

Canstar’s Mortgage Payment Calculator, above, can give a rough visual reference of how a principal and interest loan works. In a “principal and interest” loan, the “principal” part of a loan is the amount borrowed. “Interest” is the amount (excluding fees) that the lender charges the borrower to obtain this loan and repay it over time. When you opt for a “principal and interest” loan, you enter into an agreement with the lender whereby you simultaneously repay the amount borrowed and the interest charged. Over time, as you make your repayments, the “principal” part of the loan will start to decrease, which in turn means that the amount of interest you pay is also theoretically reduced.

With a home loan, the lender charges interest based on an annual percentage rate. Using this rate, interest is usually calculated daily on the current loan balance and the interest amount is divided by 365 to give the daily interest amount. Since interest is typically billed monthly, the daily interest amounts for the month are added up and this total is added to your loan balance. At the start of a loan, a higher proportion of your repayments is usually spent on interest, so the principal decreases more slowly than near the end of the loan.

Learn more: Mortgage principal and interest loans, what is it exactly?

What are the mortgage rates available?

Home loans can offer a variable or fixed rate of interest, or you can split your loan so that part of your loan is at a fixed rate and the rest at a variable rate. With fixed rate home loans, your interest rate is locked in for a certain period (usually one to five years). With variable rate home loans, your interest rate can go up or down over the life of your loan, depending on a number of factors such as the Reserve Bank’s official cash rate.

The interest rate on your home loan can make a big difference in the total amount of interest you pay, with your home loan amount being another key factor.

Explore: What are the current interest rates on home loans?

How much do I need for a home deposit?

A deposit is a percentage of the purchase price or the value of the home you hope to buy, and it’s money you usually need to save up front. Before you can figure out how much deposit you need – or whether the savings you already have are enough – it’s a good idea to figure out how much you can actually borrow. Next, it comes down to determining how much down payment you would need to save if you were to take out a home loan to buy a property where you want it. Keep in mind that you may need to pay for mortgage loan insurance if your deposit is less than 20% of the property’s value.

Explore: How Much Do You Really Need for a Home Loan Deposit?

Does my credit score count when applying for a home loan?

If you are applying for a loan or considering refinancing, one thing to consider might be to check your credit score.

Check your credit score for free

Your income, profession and age are all factors that could potentially affect your ability to get a home loan. However, your credit score can also be an important factor that your lender can take into consideration when assessing your loan application. For this reason, it may be a good idea to brush up on your knowledge of your current credit score and consider whether you could do more to maintain or improve it.

Explore: How Does My Credit Score Affect My Ability To Get A Home Loan?

How long to pay off my mortgage with additional payments: Calculator

Making extra payments on your mortgage could help you pay it off faster, as it could reduce the time it takes to pay off the loan and potentially save you on interest in the long run. However, some lenders have caps on how much you can pay back within a specified time frame, especially when it comes to fixed rate loans, so it’s a good idea to discuss this with your lender. If you are considering ways to speed up your loan repayment, you may want to consider using Canstar’s Supplemental Home Loan Repayment Calculator.

Additional reimbursement calculator

It may also be a good idea to consider whether having a clearing account or a repurchase facility attached to your loan could help you speed up your loan repayment.

Explore: 5 Ways To Pay Off Your Mortgage Faster

What other home loan calculators could I use?

Canstar offers a range of other calculators that could help you plan your finances.

Canstar financing calculators

If you are buying a home and want to get an estimate of how much you could borrow, you can try the Home Loan Borrowing Power Calculator.

Borrowing power calculator

Canstar’s stamp duty calculator can help you determine how much tax you may need to pay if you are considering buying a home, based on the purchase price of the property, its location, and your location. situation.

Stamp duty calculator

If you are evaluating multiple home loan options, Home Loan Comparison Calculator can help.

Home loan comparison calculator

Finally, you might be considering a split loan, where part of the loan is fixed for fixed rate repayments and the rest at a variable rate. In that case, our split loan calculator can be helpful.

Split Home Loan Calculator


Last updated: 06/17/2021

This content has been reviewed by sub-editor Tom Letts prior to publication as part of our fact-checking process.


Author: Amanda Horswill

A journalist for over two decades, Amanda Horswill is Canstar’s digital editor. Amanda has covered a range of topics including property, lifestyle, hyper-local news, data journalism, the arts, and careers. Prior to joining Australia’s largest financial comparison site Canstar, she was Editor-in-Chief of Brisbane News, Associate Editor for The Sunday Mail, Associate Editor – Digital at Quest Community News and many other positions. of management. Amanda is fascinated by the ever-changing world of finance. A passionate follower of the motto “knowledge is power”, she strives to translate news into practical information that will help readers make informed decisions about their future. When not analyzing the latest economic news, Amanda is digging through local property listings, looking for her next remodel project. She holds a Bachelor of Arts (Journalism, Media Studies and Production, and Public Relations) and Post Graduate Certificate in Editing and Editing from the University of South Queensland. Follow her on Twitter or LinkedIn and Canstar on Facebook. Meet the Canstar editorial team.




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