Mortgage repayment calculator

Your mortgage repayment is set so that, if the interest rate stayed the same and you paid on time every time, the loan would be paid off by the end of the term. Early repayments are mostly interest. Later repayments are mostly principal. A small change in the rate or the term can add or remove tens of thousands of dollars of interest over the life of the loan.

The Never Lose Interest mortgage repayment calculator estimates principal-and-interest repayments from the loan amount, the interest rate and the term you enter. This explainer shows the method behind those figures, and the things a simple calculator leaves out, such as fees, rate changes and your lender's serviceability assessment. If you are comparing a new loan with your current one, see refinancing a home loan. How repayments sit in a rent-versus-buy comparison is in buying versus renting.

This is general information only. It is not personal advice, a loan offer or a credit assessment, and it does not take into account your objectives, financial situation or needs. Using a calculator does not mean a lender will approve a loan. Consider speaking with a licensed finance professional before you borrow.

How are mortgage repayments calculated?

For a standard principal-and-interest loan, the repayment is a fixed amount (at a given rate) that covers the interest for that period and also pays down some of the balance. The usual formula, used by the government's Moneysmart calculator and by most repayment tools, is:

Repayment = P x [r(1 + r)^n] / [(1 + r)^n - 1]

• P is the loan amount.
• r is the interest rate per repayment period, not the annual rate. For a 6% annual rate with monthly repayments, r is 0.06 divided by 12, which is 0.005.
• n is the number of repayments. A 30-year loan repaid monthly has 360 repayments.

Moneysmart's assumptions, last updated 27 October 2026, are worth keeping in mind. The model assumes the interest rate does not change for the life of the loan. Interest is compounded at the same frequency as the repayment you select (weekly, fortnightly, monthly, quarterly or annually). It does not include upfront costs such as establishment fees, and it does not test whether you can afford the repayment. It is a model, not a prediction.

If the rate later rises, the repayment on a variable-rate loan will usually rise, or the term will extend if the lender allows that. If the rate falls, the opposite can happen, depending on how your loan is set up.

A worked example

These figures are an illustration, using a 6% annual interest rate. They are not a current market rate, and they assume the rate never changes.

A $600,000 loan over 30 years, repaid monthly at 6% a year, has a repayment of about $3,597 a month.

Over the full term you would repay about $1,295,029 in total, of which about $695,029 is interest and $600,000 is principal.

The same loan over 25 years would cost about $3,866 a month. You would pay more each month, but total interest would fall to about $559,743, a saving of roughly $135,000 if the rate stayed at 6%.

At 5.5% instead of 6%, the 30-year monthly repayment would be about $3,407, and total interest about $626,424. At 6.5%, the monthly repayment would be about $3,792, and total interest about $765,267. A 0.5 percentage point move either way changes the monthly repayment on this loan by around $190, and the lifetime interest by around $70,000, if the new rate lasted the whole term.

Halving or doubling the example does not always feel linear when you look at a payslip, but the repayment itself does scale with the loan amount at a given rate and term. A $500,000 loan at the same 6% over 30 years is about $2,998 a month. A $700,000 loan is about $4,197 a month.

Roundings of a dollar or two can appear between calculators, depending on how they treat fractions of a cent.

What is the difference between principal-and-interest and interest-only?

A principal-and-interest (P&I) repayment, like the example above, pays interest and reduces the balance each period. An interest-only repayment covers the interest and leaves the balance unchanged. On a $600,000 loan at 6%, the interest-only payment is $3,000 a month ($600,000 x 0.06 / 12). That is lower than the $3,597 P&I figure, but you are not paying the loan down. When the interest-only period ends, repayments rise, because the same principal then has to be repaid over the years that are left.

Interest-only can be useful in some investment situations, and it can also leave you with a larger debt, more interest over the life of the loan, and a sharp jump in repayments later. Lenders assess these loans under their own rules, and the tax treatment of interest depends on how the borrowed money is used. That is a separate question from the repayment calculation, and it is one to take to a tax agent if the loan is for an investment property. From 1 July 2027, the negative gearing rules for many established residential properties also change. See the Never Lose Interest guide to those changes if you are borrowing to invest.

The Never Lose Interest repayment calculator is built for principal-and-interest loans. If you need an interest-only estimate, use a tool that is designed for that calculation, or work it out as loan amount times annual rate divided by the number of payments in the year, then plan for the P&I repayment that will apply afterwards.

How can I repay a home loan sooner?

Three levers reduce interest and shorten the term, if your loan allows them and you can afford them.

A shorter term. Moving from 30 years to 25 years, as in the example above, lifts the monthly repayment and cuts a large amount of interest. A still shorter term cuts interest further, but the repayment has to remain affordable if the rate rises.

Extra repayments. Paying more than the minimum, or making a lump sum, reduces the balance sooner, so later interest is calculated on a smaller amount. Even a modest extra amount, paid consistently, can take years off a long loan. Most variable-rate loans allow extra repayments. Many fixed-rate loans limit them, or charge a fee if you exceed a cap. Check your contract before you assume you can pay ahead.

More frequent repayments. If you take the monthly repayment and pay half of it every fortnight, you make 26 half-payments a year, which is the same as 13 monthly payments. That extra month's worth of principal, paid each year, shortens the term and reduces interest, provided the lender credits the payments that way. A genuine fortnightly repayment, recalculated from a fortnightly interest rate, is a slightly different figure from half of the monthly repayment. Ask your lender how it treats fortnightly and weekly payments, because practice is not identical across the market.

An offset account is a related tool, not an extra repayment. If your loan has a 100% offset, the interest is calculated on the loan balance minus the amount in the offset account. Money sitting in the offset still belongs to you, and you can usually spend it, but while it is there it reduces the interest that is accruing. The effect is similar to having a smaller loan, without actually paying the loan down. Whether an offset is better for you than making extra repayments, or than investing the cash elsewhere, depends on the rate, fees, tax and your need for access to the money. The Never Lose Interest comparison of offset accounts, extra repayments and investing works through that choice. A calculator can show the interest effect. It cannot tell you which option is right.

What does a repayment calculator leave out?

A repayment figure is only one part of the cost of a home loan, and it is only one part of whether you should borrow.

Upfront costs, such as stamp duty, legal fees, lenders' mortgage insurance and establishment fees, are not in the standard repayment formula. Ongoing fees are not either, unless you add them in by hand. When you compare advertised loans, look at the comparison rate as well as the headline interest rate. The comparison rate is a standard figure that includes the interest rate and certain fees, so a cheap-looking rate with high fees is easier to spot. It still does not capture everything, and it assumes you keep the loan for a set period.

The calculator also does not know your income, your other debts, or a lender's serviceability buffer. Approval is a separate assessment. Many lenders test whether you could still afford the loan if the rate were higher than the rate on offer. A repayment that looks comfortable today may not pass that test, or may not be comfortable if the rate rises after settlement.

Fixed-rate loans give you a set repayment for the fixed period, then the loan usually reverts to a variable rate. Breaking a fixed rate early can trigger a break cost. Variable-rate loans can move when the lender changes its rate, which may or may not match a change in the Reserve Bank's cash rate.

If you already have a loan and want to see the effect of a lump sum or a higher repayment, use a "pay off sooner" style calculation: start with the current balance, the current rate and the remaining term, then change the repayment or reduce the balance. Moneysmart's mortgage calculator includes a section for that.

Frequently asked questions

How much would a $600,000 mortgage cost per month?

It depends on the rate and the term. At a 6% annual rate over 30 years, a principal-and-interest repayment is about $3,597 a month, before fees. At a different rate, or over a shorter term, the figure will change. Put your actual rate and term into the Never Lose Interest calculator rather than relying on this illustration.

Does paying fortnightly always save interest?

It saves interest if you end up paying more over the year than you would have paid monthly, or if payments are credited in a way that reduces the balance sooner. Paying half a monthly repayment each fortnight usually means 13 months' worth of payments a year, which does reduce interest. Paying a true fortnightly repayment that has already been recalculated to add up to the same annual amount may save much less. Confirm the arrangement with your lender.

What is an offset account?

It is a transaction or savings account linked to your home loan. With a 100% offset, interest is charged on the loan balance minus the offset balance. A $600,000 loan with $50,000 in a 100% offset is charged interest as if the loan were $550,000, while the $50,000 remains your money.

Can I use this calculator to work out how much I can borrow?

A repayment calculator answers "what would the repayment be on this loan?" A borrowing power calculator asks a different question: how large a loan could these repayments support? That second question also depends on your income, expenses, other debts and a lender's assessment rules. The two results should not be treated as a pre-approval.

Why is my lender's repayment slightly different from the calculator?

Lenders can use a different number of days in the year, charge interest daily and debit it monthly, include a fee in the repayment, or round in a particular way. Introductory rates, packaged discounts and interest-only periods will also move the number. Use your loan contract or the lender's schedule as the official figure.

Are stamp duty and lenders' mortgage insurance included?

Not in the standard repayment formula. You need to add those costs separately when you work out how much cash you need at settlement, and whether you will capitalise any of them into the loan (which would then increase the repayment). The Never Lose Interest stamp duty explainer covers duty in each state and territory.

General information warning

This article, and the Never Lose Interest mortgage repayment calculator, are general information only. They are not personal financial product advice, a credit guide, or an offer of credit. They do not take into account your objectives, financial situation or needs, and they do not assess your ability to repay a loan. Home loans are a significant commitment. Consider seeking advice from a licensed finance professional, and read the lender's contract and comparison rate, before you borrow or refinance.

Sources

• Moneysmart, Mortgage calculator, last updated 27 October 2026, including the calculator assumptions and the description of principal-and-interest loans.
• Moneysmart, Choosing a home loan.
• Reserve Bank of Australia, Economic and Financial Statistics, Housing Lending Rates, cited by Moneysmart as the source of the average interest rate used in its calculator (no rate is reproduced here, because advertised and average rates change).
• Australian Taxation Office and Treasury materials on the 2027 negative gearing changes, summarised in the Never Lose Interest guide to those reforms.

Last reviewed: November 2026.