Home Loan Repayment Calculator
Calculate your Australian home loan repayments with offset accounts and extra payments. See how much interest you'll save and when you'll own your home outright.
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How are mortgage repayments calculated in Australia?
In Australia, home loan repayments are calculated using the loan amount (principal), interest rate, and loan term. Most Australian banks calculate interest daily based on the outstanding balance and charge it monthly. This means the interest component of your repayment decreases over time as you pay down the principal.
Understanding Offset Accounts
An offset account is a transaction account linked to your home loan. The balance in this account is 'offset' against your loan balance when calculating interest. For example, if you have a $500,000 loan and $50,000 in your offset account, you'll only pay interest on $450,000. This can save thousands in interest over the life of your loan without actually making extra repayments.
The Power of Extra Repayments
Making extra repayments, even small amounts, can significantly reduce your loan term and total interest paid. Every dollar of extra repayment goes directly towards reducing your principal, which means less interest charged in future periods. Our calculator shows you exactly how much time and money you could save.
Monthly vs Daily Interest Calculation
While monthly interest calculation is simpler to understand, most Australian lenders use daily interest calculation. With daily calculation, interest accrues each day based on that day's outstanding balance, then is added to your loan balance monthly. This method is fairer as it immediately recognizes any repayments or redraws you make.