How mortgage repayments are calculated
Your repayment is worked out from the loan amount, the interest rate and the number of payments. The same formula is used whatever frequency you choose.
M = P × r ÷ (1 − (1 + r)^−n)
- P is the loan amount: home price minus your initial deposit.
- r is the yearly interest rate divided by payments per year: 12 monthly, 26 fortnightly or 52 weekly.
- n is the total number of payments: loan term × payments per year.
- Each frequency amortises the loan over the selected term. This is not an accelerated half-monthly payment plan.
- Extra repayments reduce principal each payment. A constant offset balance reduces the interest-bearing balance, not the loan principal.
- Interest-only payments cover interest during the selected period. Afterwards, the remaining balance is repaid over the remaining term.
- The rate stays constant. Fees are paid separately, not added to the loan. Taxes, insurance and purchase costs are excluded.
Worked example — A $500,000 home with $100,000 down leaves a $400,000 loan. At 6.5% over 30 years, the payment is about $2,528 a month, and total interest is about $510,000.
Popular mortgage scenarios
| Home price | Initial deposit | Interest rate | Loan term | Monthly required repayment | Total interest | Total loan repayments |
|---|---|---|---|---|---|---|
| $300,000 | $60,000 | 6.5% | 30 years | $1,516.96 | $306,106.77 | $546,106.77 |
| $400,000 | $80,000 | 6.5% | 30 years | $2,022.62 | $408,142.36 | $728,142.36 |
| $500,000 | $100,000 | 6.5% | 30 years | $2,528.27 | $510,177.95 | $910,177.95 |
| $600,000 | $120,000 | 6.5% | 30 years | $3,033.93 | $612,213.54 | $1,092,213.54 |
| $800,000 | $160,000 | 6.5% | 30 years | $4,045.24 | $816,284.73 | $1,456,284.73 |
| $500,000 | $100,000 | 6.5% | 25 years | $2,700.83 | $410,248.59 | $810,248.59 |
| $500,000 | $100,000 | 6.5% | 20 years | $2,982.29 | $315,750.21 | $715,750.21 |
| $400,000 | $40,000 | 6.5% | 30 years | $2,275.44 | $459,160.16 | $819,160.16 |
Swipe the table sideways to see the rest.
Each line is worked out exactly the way the calculator above works. Put your own price, deposit and rate in above to see your own figures.
Ways to pay less interest
Make extra repayments
Every extra dollar comes straight off the principal, so interest is charged on less from the next payment.
Pay fortnightly
26 half-monthly repayments add up to 13 monthly repayments a year instead of 12 — no single lump sum.
Review your rate
A small rate cut on a large balance can save thousands across the life of the loan.
Assumptions & sources
Planning estimate, not lender pricing. Rates stay constant; repayments use 12 months, 26 fortnights or 52 weeks per year. Offset balances stay constant. Fees are paid separately and are prorated to the estimated loan term. Most lenders calculate interest daily, so their figures may differ.
Defaults are examples, not current market rates. This calculator works for any currency and country — just enter your own figures. Fixed/variable loan rules, offset eligibility and extra-payment limits depend on your lender and local regulations.
Things to consider
- A bigger initial deposit lowers the loan amount and loan-to-value ratio.
- A 15-year term costs more each month but far less overall.
- Try a higher interest rate to see how much room your budget has.
- Fixed-rate loans may limit extra repayments. Offset availability and fees depend on the lender.
Frequently asked questions
Does this include property tax?
No. It shows principal and interest only. Add tax and insurance from your local estimates.
What is a good down payment?
20% is common because it often avoids mortgage insurance, but many loans accept less.
Is this result a loan offer?
No. It is an estimate. Your lender's figures depend on your credit and fees.
Are weekly repayments the same as a quarter of the monthly payment?
No. This tool recalculates for 52 payments per year. Paying one quarter of a monthly repayment each week makes 13 monthly-payment equivalents per year and is an accelerated strategy.
What costs are not included?
Stamp duty, conveyancing, property taxes, insurance and lenders mortgage insurance are not estimated. Optional loan fees are shown separately. Amounts use the same dollar currency you enter; no exchange conversion is applied.
How accurate is the offset estimate?
The entered offset balance is assumed constant with a 100% offset. Interest is modelled per payment period. Lenders often calculate interest daily, so real results depend on payment dates and changing balances.
Results are estimates for general information only, not financial, medical or professional advice.