Extra Mortgage Repayment Calculator Australia
See how making extra repayments on your home loan could reduce your mortgage term and total interest. Enter your loan amount, interest rate, remaining term and additional repayment to compare your standard mortgage with an accelerated repayment plan.
Mortgage Details
Enter your current loan details and the extra amount you plan to pay with each regular repayment.
Mortgage Payoff Comparison
Extra Repayment Mortgage Schedule
Compare the estimated remaining balance under the standard repayment schedule with the balance after making the selected extra repayment.
| Year | Standard Balance | Balance With Extra | Standard Interest Paid | Interest With Extra |
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How to Use the Extra Mortgage Repayment Calculator
Enter your current home loan balance, annual interest rate and the remaining loan term. Select your repayment frequency and enter the additional amount you intend to contribute with every regular repayment.
The calculator compares your normal mortgage schedule with a second schedule that includes the additional repayment.
Results include:
- Estimated standard mortgage repayment;
- Regular repayment including the extra amount;
- Interest payable under the standard mortgage schedule;
- Estimated interest after adding extra repayments;
- Estimated interest saved;
- Approximate time saved on the mortgage;
- Original and accelerated payoff dates; and
- A year-by-year comparison of the remaining loan balance.
How Do Extra Mortgage Repayments Work?
A principal-and-interest mortgage repayment generally contains both interest and principal. When you make an additional repayment, the extra amount generally reduces the outstanding principal sooner, assuming the lender applies it directly to the loan balance.
Because future interest is calculated on a smaller outstanding balance, this can reduce the amount of interest charged over the remaining loan term.
The additional amount reduces principal faster, which can reduce both the remaining loan term and total interest.
Extra Mortgage Repayment Example
For example, consider:
- Mortgage balance: $600,000
- Interest rate: 6.00% p.a.
- Remaining term: 30 years
- Repayment frequency: Monthly
- Extra repayment: $200 per month
The calculator compares the original 30-year repayment schedule with a schedule where an extra $200 is added to every monthly repayment.
The exact result depends on the interest rate, frequency and other assumptions entered above.
How Much Can Extra Repayments Save?
The amount saved depends on several factors, including:
- The outstanding mortgage balance;
- The interest rate;
- The remaining loan term;
- How much extra you repay;
- How often you make extra repayments; and
- How your lender calculates interest.
In general, extra repayments made earlier in a long mortgage can have a larger effect because the reduced balance affects interest calculations for more future repayment periods.
Why Can Extra Repayments Reduce Interest?
Mortgage interest is generally calculated using the outstanding loan balance. Reducing that balance faster means there is less principal on which future interest can accrue.
For example, if a $1,000 extra repayment permanently reduces your outstanding balance by $1,000, subsequent interest calculations may be based on that lower balance, subject to your lender’s loan terms and calculation method.
Should I Make Monthly, Fortnightly or Weekly Extra Repayments?
The appropriate frequency depends on your loan product, cash flow and lender rules.
This calculator assumes that the amount entered in the Extra repayment field is added to each repayment at the frequency you select.
For example:
- $100 monthly means approximately 12 extra contributions per year;
- $100 fortnightly means approximately 26 extra contributions per year; and
- $100 weekly means approximately 52 extra contributions per year.
Therefore, the same dollar amount entered at different frequencies represents different total additional repayments per year.
Extra Repayments vs Mortgage Offset Account
Both extra repayments and a qualifying mortgage offset account can potentially reduce mortgage interest, but they work differently.
Extra repayments
An extra repayment directly reduces the mortgage balance, subject to the terms of your loan.
Offset account
An offset account generally retains your money in a linked account while reducing the mortgage balance used for interest calculations, depending on the product.
Whether one option is preferable depends on loan features, fees, accessibility of funds and personal circumstances.
Can I Make Unlimited Extra Mortgage Repayments?
Not necessarily. Some home loans allow unlimited additional repayments, while others may restrict them.
Restrictions can be particularly relevant to some fixed-rate loans. A lender may impose limits, fees or break costs depending on the loan contract.
Check your mortgage terms before making large additional repayments.
What Is Not Included in This Calculator?
This calculator does not automatically account for:
- Loan fees;
- Offset account balances;
- Interest rate changes;
- Redraw transactions;
- Repayment holidays;
- Future refinancing;
- Fixed-rate break costs;
- Lender-specific daily interest calculations; or
- Changes in repayment frequency during the loan.
Extra Repayment Calculator Assumptions
For calculation purposes, this tool assumes:
- The mortgage is principal and interest;
- The interest rate remains constant;
- The required repayment remains constant;
- The entered extra amount is paid with every scheduled repayment;
- Extra repayments are applied to principal immediately;
- No fees are charged for extra repayments;
- No redraws are made; and
- The loan continues until the outstanding balance reaches zero.
Related Home Loan Calculators
Extra Mortgage Repayment Calculator FAQs
Do extra mortgage repayments reduce interest?
Generally, paying additional principal sooner can reduce future interest because interest is calculated on a lower outstanding loan balance. The actual result depends on your lender and loan terms.
Can extra repayments shorten my home loan?
Yes. If repayments above the required amount are applied to principal and maintained over time, the mortgage may be repaid earlier than the original loan term.
Is it better to make extra repayments early?
Extra repayments made earlier can have more time to reduce future interest, although the actual benefit depends on the loan balance, rate, remaining term and lender rules.
Can I make extra repayments on a fixed-rate mortgage?
Some fixed-rate loans limit additional repayments or may impose fees or break costs. Check your loan contract or contact your lender before making significant additional repayments.
Does this calculator include an offset account?
No. The calculator models direct extra repayments. Use the Mortgage Offset Calculator to model an offset balance separately.
Are the savings shown guaranteed?
No. Results are estimates based on a constant interest rate and the other assumptions used by the calculator. Actual lender calculations and future interest rates can differ.