How much can I save with extra repayments?

Even small extra repayments can save significant money. For example, paying an extra $100/month on a $500,000 loan at 6% over 30 years could save over $50,000 in interest and pay off the loan 4+ years early. Use our calculator to see your specific savings.

What's the average mortgage rate in Australia?

Mortgage rates vary by lender and loan type. As of 2025, variable rates typically range from 5.5% to 7.5%, while fixed rates depend on the term length. Always compare rates from multiple lenders and consider the comparison rate which includes fees.

Mortgage Calculator Australia 2025 | Home Loan Repayments

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How Mortgage Repayments Work

Each mortgage repayment consists of two parts: principal (paying down the loan) and interest (the cost of borrowing). In the early years, most of your payment goes to interest. As the loan balance decreases, more goes to principal.

Principal & Interest (P&I)

The standard loan type. Each payment reduces your loan balance and covers interest. Most owner-occupier loans are P&I.

Interest Only (IO)

You only pay interest for a set period (usually 1-5 years). The loan balance doesn't decrease. Often used by investors.

The Power of Extra Repayments

Making extra repayments is one of the most effective ways to pay off your mortgage faster. Even small amounts add up significantly over the life of a 30-year loan.

Example: $500,000 loan at 6% over 30 years

Extra $100/month Save ~$45,000 interest Pay off 4 years early

Extra $200/month Save ~$80,000 interest Pay off 7 years early

Extra $500/month Save ~$140,000 interest Pay off 12 years early

Weekly vs Fortnightly vs Monthly

Choosing a more frequent repayment schedule can save you money without increasing your monthly budget. Here's why:

Monthly: 12 payments per year
Fortnightly: 26 payments per year (equivalent to 13 monthly payments)
Weekly: 52 payments per year (equivalent to 13 monthly payments)

By paying fortnightly (half the monthly amount), you make one extra monthly payment per year, which goes directly to reducing principal.

Frequently asked questions

How is mortgage repayment calculated?

Mortgage repayments are calculated using the PMT formula: P × (r(1+r)^n) / ((1+r)^n - 1), where P is the principal, r is the periodic interest rate, and n is the total number of payments. This gives you the fixed payment needed to pay off the loan over the term.

Should I make weekly or monthly repayments?

Weekly or fortnightly repayments can save money because you make more payments per year. Fortnightly payments are equivalent to 13 monthly payments per year instead of 12, helping you pay off your loan faster.

What is a comparison rate?

The comparison rate includes both the interest rate and most fees and charges, giving you a more accurate picture of the true cost of a loan. Always compare loans using the comparison rate rather than just the headline rate.

What is an offset account?

An offset account is a transaction account linked to your mortgage. The balance offsets your loan balance for interest calculations. For example, $50,000 in offset against a $500,000 loan means you only pay interest on $450,000.

Should I fix my interest rate?

Fixed rates provide certainty - your repayments won't change during the fixed period. However, you may miss out if rates drop, and there are often restrictions on extra repayments. Many borrowers split their loan between fixed and variable.

Tax Accuracy & Sources

Reviewed: March 2026 · Tax year: 2025-26

Estimates mortgage repayments and interest using the standard PMT formula. Does not account for lender fees, comparison rates, lenders mortgage insurance, offset account interest calculations, or redraw facilities.