How much does
borrowing really cost?

Most Australian loans use an amortisation formula that splits each repayment into principal and interest portions. The monthly repayment depends on the loan amount, interest rate, and loan term. Early repayments are mostly interest, shifting toward principal over time.

A fixed rate locks your interest rate for a set period (typically 1-5 years), giving predictable repayments. A variable rate moves with the market, meaning repayments can go up or down. Many Australian borrowers split their loan between both to balance certainty and flexibility.

Lenders typically allow borrowing up to 6-8 times your gross annual income, but the actual amount depends on your expenses, existing debts, deposit size, and the lender's serviceability buffer (currently 3% above the loan rate). Use a borrowing power calculator to get a personalised estimate.

Yes. Lenders include your HECS/HELP compulsory repayment as a liability when assessing how much you can borrow. The higher your income, the larger the repayment percentage, which reduces the amount a lender will offer you.

Common fees include application or establishment fees, ongoing monthly or annual fees, early exit or break costs (especially on fixed rates), and valuation fees for property loans. Always compare the comparison rate, which bundles most fees into a single percentage for easier comparison.