Mortgage Repayment Calculator Australia 2025‑26
About to start a new job, or just want to know what you actually take home.
Calculate mortgage repayments for any loan amount, rate, and term. Compare variable vs fixed, P&I vs interest‑only, monthly vs fortnightly. Model offset accounts and extra repayments.
Estimates only — enter your loan details below for an exact figure.
Select the question that matches where you are right now.
Your mortgage repayment is the fixed monthly amount needed to repay your loan at principal and interest. It covers the interest charged on the outstanding balance plus a portion of the principal. Early in the loan the split is mostly interest; later it shifts heavily toward principal.
Three variables determine your repayment: loan amount, interest rate, and loan term. Rate and term are multiplied in the annuity formula — even a 0.5% rate change on a large loan can mean $200+ per month.
A P&I loan repays both principal and interest each month. An interest-only (IO) loan only pays interest — the balance does not reduce, and when the IO period ends, repayments jump significantly.
On a fixed rate loan your repayment is locked for the fixed period. On a variable rate loan, your repayment moves whenever the lender adjusts its rate following RBA decisions.
If your repayment seems higher than expected, these are the usual reasons.
A 6.2% rate is meaningfully higher than the 3–4% rates of 2020–21. Even at current rates, a 30-year $600k loan costs $3,671/month — more than double what it cost on the same loan at 2.5%.
Extending the term lowers the monthly repayment but significantly increases total interest. A $500k loan at 6.2% over 30yr costs $598k in interest; over 20yr it costs $365k — a $233k difference.
If rates rose between your borrowing capacity estimate and settlement, your actual repayment will be higher than the estimate. APRA's 3% buffer is designed to ensure you can absorb this.
Extra repayments are the highest-leverage action available to a mortgage holder. Even small amounts applied consistently produce dramatic long-term savings.
Any payment above your minimum reduces the outstanding principal. This permanently reduces the interest charged in every future period — the saving compounds over time, not just for the month you pay extra.
Reduces the loan term by approximately 8 years and saves roughly $145,000 in total interest over the loan life.
Extra repayments made directly to the loan go into redraw. An offset account keeps the money accessible while achieving the same interest saving. Investors often prefer offset for tax flexibility.
An offset account is a transaction account linked to your mortgage. Every dollar in offset reduces the balance on which interest is calculated — but leaves your minimum repayment unchanged.
Saves approximately $3,100 in interest per year. Over 10 years (assuming the balance stays similar), that is $31,000+ saved — tax-free.
Both reduce interest equally. Offset keeps money accessible and outside the loan. Redraw reduces the loan balance directly. Investors typically prefer offset for tax deductibility reasons.
Most major bank variable rate loans include a 100% offset account. Fixed rate loans typically do not have offset (or cap the offset benefit). Factor this into fixed vs variable decisions.
To reduce your repayment amount or total interest, these are the most effective levers available after settlement.
A 0.5% rate reduction on a $600k loan saves approximately $185/month. After broker fees and break costs (for fixed loans), refinancing typically pays back within 12–18 months.
Fortnightly repayments (half the monthly amount, 26 times/year) are equivalent to making 13 monthly payments per year. Reduces a 30-year loan by 3–4 years with no extra cash outlay.
Even $200/month extra on a $500k loan at 6.2% saves approximately 4 years and $85,000 in interest. Start early — interest savings compound over the full remaining term.
Once you have your repayment figure, these are the natural next calculations depending on your stage.
If you are still searching for a property, verify the maximum loan amount your income can service before committing to a purchase price.
Borrowing capacity calculator → →Calculate how much your savings balance reduces total interest and years on your loan.
Offset calculator → →Add stamp duty, legal fees, and other upfront costs to your full purchase budget.
Stamp duty calculator → →How mortgage repayments are calculated in Australia
The annuity formula
Mortgage repayments use the standard annuity formula: M = P[r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. This formula produces a fixed monthly payment that covers both interest and principal repayment, with the loan balance reaching zero at the end of the term. For current Australian mortgage-rate data, see RBA — Lenders' Interest Rates (F6), and for the 3% serviceability buffer see APRA — Residential Mortgage Lending.
How interest is charged
Interest is calculated daily on the outstanding loan balance. Most lenders charge this interest to the account monthly. Your fixed monthly repayment first covers the interest charged, with the remainder reducing the principal. In the early years of a 30-year loan, roughly 75–80% of each payment is interest at current rates. By the final years, nearly all of each payment is principal.
| Loan | Rate | Term | Monthly | Total interest |
|---|---|---|---|---|
| $400,000 | 6.2% | 30yr | $2,448 | $481,240 |
| $500,000 | 6.2% | 30yr | $3,060 | $601,550 |
| $600,000 | 6.2% | 30yr | $3,671 | $721,860 |
| $700,000 | 6.5% | 30yr | $4,424 | $892,744 |
| $800,000 | 6.5% | 30yr | $5,056 | $1,020,280 |
Mortgage repayment examples by loan size and rate — 2026-27
These figures show monthly principal and interest repayments at common loan amounts. Fortnightly repayments are calculated as monthly × 12 ÷ 26 — making 26 half-payments per year, equivalent to 13 full monthly payments.
| Loan amount | Rate | Monthly (30yr) | Fortnightly | Annual total |
|---|---|---|---|---|
| $300,000 | 5.5% | $1,703 | $851 | $20,436 |
| $300,000 | 6.2% | $1,835 | $917 | $22,020 |
| $400,000 | 6.2% | $2,448 | $1,224 | $29,376 |
| $500,000 | 6.2% | $3,060 | $1,530 | $36,720 |
| $600,000 | 6.5% | $3,792 | $1,896 | $45,504 |
| $750,000 | 6.5% | $4,740 | $2,370 | $56,880 |
Principal and interest vs interest-only loans
Principal and interest (P&I)
A P&I loan repays both interest and principal each month. The outstanding balance falls steadily over the term, reaching zero at the end. This is the most common structure for owner-occupiers. Interest rates on P&I loans are typically 0.2–0.5% lower than equivalent IO loans.
Interest only (IO)
An IO loan requires only interest repayments during the IO period (typically 5 years). The principal balance does not reduce. When the IO period ends, the loan converts to P&I — and the repayment jumps significantly, because the full principal must be repaid in the remaining (shorter) term.
| Scenario | IO repayment | P&I repayment | After IO ends |
|---|---|---|---|
| $500k, 6.2%, 5yr IO then 25yr P&I | $2,583/mo | $3,060/mo | $3,349/mo |
| $600k, 6.5%, 5yr IO then 25yr P&I | $3,250/mo | $3,792/mo | $4,013/mo |
Which is right for you?
IO loans are most commonly used by property investors who want to maximise tax-deductible interest while keeping repayments low. They are rarely appropriate for owner-occupiers except in specific cash flow circumstances. APRA restricts the volume of IO lending at each institution.
How extra repayments dramatically reduce your loan
Why extra repayments work so well
Every extra dollar paid above your minimum reduces the outstanding principal permanently. This reduces the interest charged in every future period — and because mortgages are long, even a small extra payment made early produces a large compound saving over decades.
| Extra/mo | On $500k at 6.2% | Years saved | Interest saved |
|---|---|---|---|
| $200 | ~4yr shorter | ~4yr | ~$85,000 |
| $500 | ~8yr shorter | ~8yr | ~$145,000 |
| $1,000 | ~13yr shorter | ~13yr | ~$210,000 |
How to make extra repayments
On a variable rate loan, you can make additional repayments at any time without penalty. On a fixed rate loan, most lenders cap extra repayments at $10,000–$20,000 per year without a break fee. Check your loan terms before making large lump sum repayments during a fixed period.
How offset accounts save interest and shorten your loan
What an offset account does
An offset account is a transaction account linked to your mortgage. The balance in the offset account is subtracted from your loan balance when the lender calculates daily interest. If you have $60,000 in offset on a $500,000 loan, interest is charged on $440,000.
Offset vs redraw
An offset account keeps your money in a separate, immediately accessible account — like a regular bank account. A redraw facility reduces the actual loan balance directly. Both produce identical interest savings. The key differences: offset money is always accessible and not considered part of the loan; redraw money has been paid into the loan and some lenders restrict or delay access.
Offset vs making extra repayments
For property investors, offset is generally preferable to redraw because the money in offset is not 'mixed' with loan funds. If you sell the investment and move the cash elsewhere, keeping it in offset preserved your deductible loan balance. Making extra repayments to redraw does not maintain this separation.
Fixed vs variable rate — impact on repayments
Fixed rate loans
A fixed rate loan locks your interest rate (and therefore your repayment) for a set period, typically 1–5 years. After the fixed period, the loan reverts to the lender's variable rate (the 'revert rate'), which is often higher than current variable rates. Fixed rate loans typically do not include offset accounts and restrict extra repayments.
Variable rate loans
A variable rate loan moves up and down with the lender's standard variable rate, which generally follows RBA cash rate decisions. Variable loans typically include offset accounts and allow unlimited extra repayments. The trade-off is repayment uncertainty.
Split loans
A split loan divides the borrowing into a fixed component (rate certainty on part of the loan) and a variable component (flexibility for extra repayments and offset on the remainder). Most major banks offer split loans at no extra cost.
How fortnightly repayments accelerate loan payoff
The fortnightly trick
Fortnightly repayments are typically calculated as your monthly repayment divided by 2, paid every 2 weeks. This results in 26 half-payments per year — equivalent to 13 full monthly payments, not 12. The extra month's payment each year reduces your principal faster.
| Loan | Rate | Monthly | Fortnightly | Years saved | Interest saved |
|---|---|---|---|---|---|
| $500,000 | 6.2% | $3,060 | $1,530 | ~3.5yr | ~$75,000 |
| $600,000 | 6.2% | $3,671 | $1,836 | ~3.5yr | ~$90,000 |
| $700,000 | 6.5% | $4,424 | $2,212 | ~3.7yr | ~$115,000 |
Important: verify your lender's calculation
Some lenders calculate fortnightly repayments as monthly × 12 ÷ 26 (the amount shown above, which produces the extra payment effect). Others calculate them as monthly × 12 ÷ 26 rounded differently, or simply as half the monthly payment charged 26 times — which does not produce the extra payment. Check with your lender.
First home buyer mortgage repayments — what to expect
Sizing the repayment to your income
Financial advisers generally recommend keeping total housing costs (repayment + rates + insurance + basic maintenance) below 30% of gross household income. At 6.2%, a $500,000 loan requires $3,060/month — which represents 30% of gross income for a household earning approximately $122,000/year.
First home buyer schemes that affect repayments
The First Home Guarantee (FHBG) allows purchase with a 5% deposit without paying LMI, but it does not reduce the loan amount or repayment. The First Home Owner Grant (FHOG) provides a cash contribution that can reduce the required loan size — for example, a $10,000 FHOG on a $600,000 purchase (at 90% LVR) reduces the loan to $530,000 and the repayment from $3,245/month to $3,184/month.
Repayment buffer
Borrowing at your absolute maximum leaves no buffer for rate rises. APRA's 3% serviceability buffer exists for this reason — but building a personal repayment buffer of 10–15% above your scheduled repayment from day one dramatically reduces financial stress if rates rise or income changes.
Australian mortgage lenders 2025
Big Four banks
CBA, Westpac, NAB, ANZ dominate. Competitive rates standard borrowers. Owner-occupier variable: 6.0-6.5% (2025).
Second-tier banks
Macquarie, BOQ, Bendigo, Suncorp, ING. Often 0.1-0.3% below Big Four. Fewer branches. Rate-focused borrowers.
Non-bank lenders
Pepper, Liberty, Bluestone, Resimac. Self-employed, adverse credit, unique properties. Rates 0.5-2% higher but flexible approval.
Mortgage brokers
Access whole-of-market. ACL licensed. Free to borrower (paid by bank). Best for complex cases: self-employed, portfolio investors.
Digital lenders
UBank, loans.com.au, Athena, Tiimely, Unloan. 100% digital. Lower rates 0.1-0.3% below Big Four. Growing market share.
Australian monthly repayment by loan size
30-year P&I monthly payment
| Loan | 5.5% | 6.0% | 6.5% | 7.0% |
|---|---|---|---|---|
| $400,000 | $2,271 | $2,398 | $2,528 | $2,661 |
| $500,000 | $2,839 | $2,998 | $3,160 | $3,327 |
| $600,000 | $3,406 | $3,597 | $3,792 | $3,992 |
| $800,000 | $4,542 | $4,796 | $5,056 | $5,322 |
| $1,000,000 | $5,678 | $5,995 | $6,320 | $6,653 |
| $1,500,000 | $8,517 | $8,993 | $9,480 | $9,980 |
Add rates (~$2-3k/yr), insurance, strata, LMI (if under 20% deposit).
Australian stamp duty by state
Stamp duty on $750k home (owner-occupier)
| State | Duty | FHB relief |
|---|---|---|
| NSW | $29,335 | Full exempt to $800k |
| VIC | $40,070 | Full to $600k (PPR) |
| QLD | $17,325 | Full to $700k FHB |
| WA | $27,430 | Concession to $530k |
| SA | $37,080 | Concession to $650k |
| TAS | $27,935 | 50% to $600k FHB |
| ACT | $20,850 | Full to $750k FHB |
FHB schemes
First Home Owner Grant: $10k-$30k by state. First Home Super Saver: $50k from super (2025). First Home Guarantee: 5% deposit without LMI. Family Home Guarantee for single parents.
Lenders Mortgage Insurance Australia
When LMI required
Deposit under 20% of property value. Protects LENDER, not you. Premium $4,000-$30,000+ based on loan size and LVR. Usually capitalized into mortgage (you borrow the LMI).
LMI cost examples
| Property | 10% deposit | 15% deposit | 20%+ |
|---|---|---|---|
| $500k | $14,500 | $8,900 | $0 |
| $750k | $22,200 | $13,300 | $0 |
| $1m | $29,800 | $17,800 | $0 |
Avoiding LMI
20% deposit. Parental guarantor. First Home Guarantee (govt guarantee replaces LMI). Professional packages (doctors, accountants) waive LMI. Family Guarantee for single parents.
❓ Frequently asked Frequently asked questions
How is my monthly mortgage repayment calculated?
Monthly repayments use the annuity formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. At 6.2% on $500,000 over 30 years: monthly rate = 0.517%, n = 360, monthly repayment ≈ $3,060.
What is the difference between P&I and interest-only?
A principal and interest (P&I) loan requires repayment of both interest and principal each month — the balance falls to zero at the end of the term. An interest-only (IO) loan requires only the interest during the IO period (typically 5 years), after which the loan converts to P&I on the remaining term — and repayments jump significantly.
How does making fortnightly repayments help?
Fortnightly repayments (half the monthly payment, paid 26 times per year) are equivalent to making 13 monthly payments instead of 12. The extra payment each year reduces the principal faster. On a $500,000 loan at 6.2%, switching to fortnightly saves approximately $75,000 in total interest and shortens the loan by 3–4 years.
Does a fixed rate change my repayment amount?
Yes — your repayment is calculated at the fixed rate when you take out the loan and stays constant during the fixed period, even if the RBA moves rates. After the fixed period ends, your loan reverts to the variable rate and your repayment is recalculated based on the remaining balance and new rate.
What is an offset account?
An offset account is a transaction account linked to your mortgage. The balance in the offset reduces the loan balance on which interest is calculated. $50,000 in offset on a $500,000 loan means interest is calculated on $450,000. Your scheduled repayment stays the same, but more of it reduces principal — effectively shortening the loan term.
Can I make extra repayments on a fixed loan?
Most fixed rate loans cap extra repayments at $10,000–$20,000 per year without a break fee. Exceeding this limit during a fixed period can trigger significant break costs. Variable rate loans generally allow unlimited extra repayments at any time.
What happens at the end of my fixed period?
Your loan automatically reverts to the lender's standard variable rate (the 'revert rate'). This rate is often higher than current competitive variable rates. Most borrowers refinance or fix again before the revert date to avoid being on the higher rate.
Is it better to have a 25-year or 30-year loan term?
A 30-year term gives you a lower monthly repayment and preserves cash flow flexibility, while a 25-year term reduces total interest significantly. On a $500,000 loan at 6.2%, the 30-year repayment is $3,060/month versus $3,335/month on 25 years — but the 25-year loan saves approximately $130,000 in total interest.
Where these figures come from
Property and mortgage figures on this page are drawn from the Reserve Bank of Australia (rate data), APRA (serviceability and lending rules), the ATO (CGT and rental rules), and State Revenue Offices (stamp duty).
- Mortgage & variable-rate data — RBA — Lenders' Interest Rates (F6).
- Lending serviceability buffer (3%) — APRA — Prudential Practice Guide APG 223.
- Capital gains tax & main residence — ATO — Capital gains tax.
- Negative gearing & rental income — ATO — Rental properties.
- Stamp duty (NSW example) — Revenue NSW — Transfer duty.
- First Home Owner Grant schemes — FirstHome.gov.au.
Last checked: July 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.