Home Loan Repayment Calculator

Work out how much your home loan repayments will be and how much interest you’ll pay.

Last updated on May 20th, 2022 at 01:06 pm by Cate Cook

Calculate your home loan repayments

Having an idea of the cost of your loan both on a month-to-month basis and over the course of your entire repayment term is highly important when it comes to approaching the comparison process. You can use Savvy’s simple calculator to give you an idea of the cost of different loans and what size you might be able to handle so you can start the comparison process today.

How to save money on your mortgage

More information about repaying your mortgage

How do I use the mortgage repayment calculator?

Savvy’s mortgage calculator is simple to use.  Just enter the details of your proposed loan into the boxes below to find out exactly what you’ll pay each month, fortnight or week and how much your mortgage will cost you over the life of your loan.

You can also play around and see how differences in your repayments or the mortgage rate will affect your overall numbers by changing the details you’ve entered and clicking on the chart to instantly see the results of the changes you’ve made. Change the loan amount, the interest rate, the loan term or repayment frequency to see what a big difference small changes can make.

How can a mortgage repayment calculator help me?

Although it doesn’t directly factor into the overall home loan process, using tools like a mortgage repayment calculator can give you a clearer idea of the size and length of home loan which are more likely to be suitable to my needs. If you already have a clear idea of what you can afford to dedicate each week, fortnight or month to the repayment of your home loan, your calculations will give you a clearer idea of what type of loan you’ll need to take out to accommodate this.

You can also utilise this calculator to help you compare your home loan options. By applying different lenders’ interest or comparison rates, as well as any fees which might apply, you can have a more detailed and accurate indication of what they’ll cost you each month and overall. For instance, if Lender A offers 2.5% p.a. on their home loans and Lender B offers 3% p.a., you can use the calculator to determine that the difference between them on a $500,000 loan over 30 years would be over $47,500.

What fees aren’t included in the mortgage repayment calculator?

Additional home loan fees you may be charged aren’t included in the calculator, as they’re highly variable between lenders. For example, some lenders will charge an application fee, and others will offer loans with no application fees at all. Below are some of the fees you may come across as you compare loans and lenders:

  • Initial application fee: from $150 up to $700
  • Annual package fee: up to $650 a year, which may include fee-free bank accounts or credit cards as part of the package deal
  • Mortgage registration fee: this varies from state to state, up to around $200. For example, in NSW it’s $147.50, in the ACT it’s $155, and QLD charges the most at $197
  • Property valuation fee: the cost of having a bank valuer assess the value of your proposed property – allow from $100 to $350
  • Pest inspection: your lender may insist that you have a pest inspection done before approving your loan, particularly in areas where termites are a common problem or if your new home has a wooden frame or footings. Allow up to $300 for a thorough pest inspection

It is worth trying to negotiate these fees with your lender, as some are willing to waive certain fees altogether, especially if you are a new client to the bank or building society.

How can the type of interest rate on my home loan impact my repayments?

Home loans come with either fixed or variable interest rates, which can have a significant impact on the cost of your repayments each instalment. This is because variable rates remain open to market fluctuation, meaning your instalments can vary in cost across your repayment term. If rate movement is in your favour, this can save you thousands of dollars over the life of your loan. However, in equal measure, you’ll be susceptible to increases in rates impacting your repayments.

Fixed interest rates, on the other hand, remain the same for a set period of one to five years. During this term, you can be safe in the knowledge that the value of your repayments won’t change, making it potentially a better option for those looking to budget accurately into the future. As mentioned, though, these terms will limit your ability to make additional repayments.

There’s a middle ground between these options, though: splitting your home loan. This enables you to fix part of your loan on a particular rate for a set term while leaving the remainder variable. In doing so, you can bring more stability to your repayments while still having the ability to make extra contributions. However, this may increase the cost of your repayments if rates rise and if your lender charges fees on both split accounts.

How much will I need to pay as a deposit?

The standard deposit required by lenders for a home loan is 20% of the cost of the purchase price of your new home.  For example, if your new home is priced at $600,000, you’d need a deposit of $120,000.  However, there are ways for you to get approved without putting forward such a large lump sum. Consider the following alternatives to see if any suit your needs as a borrower.

Options for deposit assistance for first home buyers

If you’re a first home buyer, there are schemes to reduce the cost of buying a new home which are specific to first homeowners, such as:

  • First Home Owner Grant: available to eligible first homebuyers for between $10,000 and $20,000
  • First Home Loan Deposit Scheme: available to homebuyers who can’t afford to pay a 20% deposit to avoid LMI, with deposits as low as 5%
  • New Home Guarantee: similar to the FHLDS, but applicable for construction loans and newly built or off-the-plan dwellings
  • Family Home Guarantee: available to single parents with at least one dependant to enable deposits as low as 2% with no LMI. There are limited places available for this scheme, so see the grant eligibility requirements of the schemes operating in your particular state for further details.
  • Low Income Home Loan Schemes: available to low income-earners across Australia, with different schemes in each state and territory

 

Other options to reduce the deposit you’ll need

There are other options available to all homebuyers to reduce the deposit you’ll need upfront, including:

  • applying for a mortgage which only requires a 5% or 10% deposit. There are many such loans available in Australia, particularly from the smaller banks and online lenders.  You can compare with Savvy to find lenders who are prepared to approve loans with smaller deposits
  • paying Lenders Mortgage Insurance (LMI), which is an insurance policy which protects the lender in the case of default on the loan. The borrower has to pay the LMI premium, which can amount to several thousand dollars. This is charged if loans of more than 80% of the value of the property are taken out.
  • using the existing equity in your home as part of the deposit for your new home loan (if this is your second or subsequent property purchase)
  • asking a close family member to act as a guarantor for your loan and applying for a guarantor mortgage. This will involve your family member offering their home equity as additional security for your loan. They must be prepared to take over the cost of paying your loan if you run into difficulties and are unable to make your loan repayments
  • taking out a personal loan to cover some of the cost of your deposit.  This can be an expensive option, but if you’re short on your deposit by just a small amount (such as $5,000 to $10,000), borrowing the additional funds may just get you over the line.  This could also be a cheaper alternative than paying for LMI

What is stamp duty and how much will it cost me?

Stamp duty is a tax charged by state governments in Australia when property is purchased.  After your deposit, it’s the next highest cost of buying a house no matter where you live in Australia (with exceptions for first homebuyers).  The amount of stamp duty you’ll have to pay will depend on several factors, such as:

  • what type of property you’re buying, with different rates applied depending on whether it’s an apartment, a unit, a duplex or a detached home
  • your location – not only which state you live in, but whereabouts in your state you live as well (for example, there’s a different rate of stamp duty in WA depending on whether you live north or south of the 26th parallel)
  • how much your new home is worth (with a sliding scale of stamp duty in most states depending on the cost of the property)
  • whether you’re an eligible pensioner or hold a health card
  • your income bracket (in the ACT)
  • if you qualify for any government fee waivers or stamp duty refunds (offered by many states and ranging from a full exemption to discounts and concessions, primarily to first homebuyers)
  • if you are an Australian citizen or a foreign national (foreign nationals are charged an additional fee in many states)
  • if it’s your first home, or if you own other property
  • whether you pay stamp duty using a paper transaction or using an electronic system (additional fees are now applied for paper transactions)

As you can see from the variables listed above, the amount of stamp duty you’ll pay will vary depending on your particular circumstances but allow a minimum of $10,000 up to as much as $100,000 for stamp duty. 

For example, for an established detached home worth $550,000 bought by Australian residents on an average income of $85,000 p.a. with no government concessions, expect to pay more than $27,500 in stamp duty in the NT, over $29,000 in SA, around $20,300 in NSW and around $26,400 in VIC.  Use Savvy’s stamp duty calculator to find out the exact amount of stamp duty you’ll be required to pay.

Frequently asked questions about home loan repayments

Should I choose a principal and interest or interest-only home loan?

In most cases, principal and interest home loans are the best choice for first-time homebuyers.  Mortgages with interest-only periods are useful for property investors who wish to free up money in the opening one to five years of their loan by repaying only the interest portion of their loan. However, they’ll likely end up costing more in interest payments overall.

Why should I use a loan’s comparison rate in the mortgage repayment calculator?

Comparison rates help borrowers compare apples with apples.  They’re based on a standard loan of $150,000 taken out over 25 years and include the interest rate and other basic fees which you’ll pay on the loan. By using the comparison rate instead of the interest rate alone, you’ll get a more accurate picture of the overall cost of your loan. The comparison rate doesn’t include all fees, though, such as those which only apply in specific circumstances (such as early repayment or redraw charges).

What is LVR?

LVR stands for loan-to-value ratio and represents the percentage of your property’s purchase price that is being financed by your lender. For example, a $500,000 home being purchased with a $50,000 deposit would have an LVR of 90%, given the deposit is worth 10% of the purchase price.

How do I know what rate to use in the calculator?

If you haven’t received your interest rate yet for your home loan, you can still use the calculator with an average rate in its place. As a general rule, you can add 2% to the minimum advertised rate from your chosen lender or lenders. This covers variables associated with your application which can impact your rate, such as your credit score and borrowing amount. The rate you receive may be higher or lower than this in reality, but this is a suitable rule for preliminary calculations.

Which other features can help me with repaying my home loan?

In addition to free additional payments and offset accounts, the following features are commonly sought by borrowers to be included as part of their home loan package:

  • Redraw facility: provides you the flexibility to withdraw funds from previously contributed additional repayments when you need them
  • Portability: enables you to change the property listed as security on your home loan while keeping the same repayment conditions.
How can I calculate my borrowing power?

You can use Savvy’s borrowing power calculator to give an estimate of how much you may be approved for on your home loan. Your individual borrowing power can be affected by a variety of factors, such as your credit score, income, savings, assets, expenses, other outstanding debts and any dependents. Different lenders will assess your borrowing power in different ways, as some are likely to be more willing to approve you for a larger loan than others.