Australia Mortgage Repayment Calculator

Australian home loans accrue interest DAILY on your outstanding balance and debit it to your loan monthly, but for a standard principal-and-interest (P&I) loan this works out mathematically equivalent to the textbook monthly-compounding reducing-balance formula used across most of the world: M = P × r × (1+r)^n ÷ ((1+r)^n − 1), where r is your nominal annual rate divided by 12. There's no compounding quirk here unlike Canada's semi-annual rule — the rate you're quoted is the rate the maths uses directly.

During an interest-only (IO) period, your monthly payment covers only the interest charged — none of it reduces the loan balance. Major Australian banks commonly cap a single IO approval at 5 years for owner-occupiers. Once the IO period ends, the loan must fully amortise to zero over whatever term remains — but on the ORIGINAL loan amount, since no principal was paid down. That produces a noticeably higher post-IO repayment than if you'd been paying principal and interest from day one — the well-known "IO cliff" this calculator flags clearly.

It depends on your rate and loan term, but as a reference point: a $560,000 loan (on a $700,000 home with a $140,000/20% deposit) at a 6% interest rate over a 30-year term comes to roughly $3,357 a month in principal and interest. Use the calculator above with your own numbers, loan type, and term for an exact figure.

30 years is the standard maximum term for an Australian home loan, whether owner-occupied or investment. A shorter term (e.g. 25 or 20 years) increases your monthly repayment but reduces total interest paid over the life of the loan — a trade-off worth comparing directly using the amortisation chart above.

No — this calculator shows the pure principal-and-interest (or interest-only) repayment on your loan amount. It doesn't include Lenders Mortgage Insurance (required when your deposit is below 20%), stamp duty, or council rates. Use our dedicated LMI Calculator and Stamp Duty Calculator to estimate those costs, and our Borrowing Power Calculator to see the fuller picture a lender uses to assess how much you can borrow.

A fixed rate locks in your interest rate (commonly for 1-5 years), so your repayment doesn't change even if the Reserve Bank of Australia moves the cash rate during that period — but fixed loans commonly cap penalty-free extra repayments at a set dollar amount per year. A variable rate moves with your lender's rate settings (which track the RBA cash rate over time) and typically allows unlimited extra repayments and full offset-account access. Compare scenarios using our Extra Repayments and Offset Account calculators.