How Long to Repay Your Home Loan Calculator

Find out how long it will take you to repay your home loan using Savvy’s handy how long to repay calculator.

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, updated on August 8th, 2023       

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One of the most important aspects of a home loan is the term length – or how long you’ve got to repay your loan.  It's vitally important to understand how your loan term will determine the size of your repayments, and how much money you can save by paying it off earlier.  Fortunately, Savvy makes this task easy using this how long to repay home loan calculator.  You can make more informed home loan decisions by comparing offers and finding a competitive one that’s just right for you and your family.

Home loan calculator explained

How do I use the how long to repay calculator?

It’s simple to use this home loan repayment calculator.  You’ll only need to enter:

  • your loan amount
  • your interest rate
  • the repayment amount
  • your repayment frequency

Once all of these have been inputted, the calculator will tell you how long it will take to pay off your loan.  If you wish to change your repayment frequency from monthly to fortnightly or weekly, use the green arrow button to select a new payment frequency.

You can now play around with different repayment amounts and see clearly for yourself how increasing the size and frequency of your loan repayments will reduce the term of your loan, and ultimately save you money on interest payments.

Why is it cheaper to make repayments fortnightly rather than monthly?

Fortnightly repayments are cheaper than monthly instalments because there are 26 fortnights in a calendar year, but only 12 months.  So, if you pay monthly, you’ll make 12 equal repayments off your loan.  But if you pay fortnightly, you’ll make 26 payments, which equates to an ‘extra’ two payments a year or the equivalent of 13 months’ worth.  This will result in your loan being paid off more quickly and interest declining more sharply, as home loan interest is calculated daily.

For example, if you enter in a $450,000 loan with an interest rate of 2.5% and repayment of $1,800 monthly, you’ll pay a total of $186,312.58 in interest, and the loan would be repaid in 29 years and 6 months.

However, if you keep the loan amount and interest rate the same, but change the repayment frequency to fortnightly and halve the repayments to $900, the interest you’ll pay drops to $163,755.70, resulting in a saving of $22,556.88 over the life of the loan. On top of this, your loan term will be reduced to 26 years and 6 fortnights.

For this reason, it’s always wise to make your loan repayments as frequently as possible, whilst still fitting in with your income or salary schedule.  If you are paid weekly or fortnightly, it’s a good idea to pay your loan off weekly or fortnightly also.

What are the main differences between fixed and variable rate home loans?

Fixed rate loans

A fixed rate loan has a fixed interest rate, which is applicable to your loan for a fixed period (known as the term of your loan).  Such loans offer the security of knowing exactly what your mortgage repayments will be well into the future, so you can plan your household budget more accurately. 

Their main downside is that you are anchored to that loan for the fixed term, which is usually between one and five years, although some lenders do allow fixed rate loans up to ten years.  If you want to take less time to repay your loan and refinance it, you may have to pay expensive early exit fees.  Furthermore, fixed rate loans don’t tend to come with interest-saving features such as offset accounts and the option to make lump sum repayments, both of which can help you pay off your loan sooner.

Variable rate loans

Variable rate loans have an interest rate that changes largely according to announcements about the underlying Australian cash rate by the Reserve Bank of Australia (RBA).  However, while lenders previously always responded to changes in the interest rate by the RBA, they’ve shown more independence in recent years to the point where most movement in interest rates is now determined by individual lenders.

The advantage of variable rate loans is their flexibility – you're not tied into the loan for a set period and are free to refinance to a better loan without paying break fees.  Variable rate loans also tend to come with many more interest-saving features which can enable you to pay your loan off faster and save on the interest you’ll pay overall.

How can I reduce the time it takes to pay off my home loan?

More questions answered about repaying home loans

Do all lenders allow you to choose your repayment frequency?

Most lenders do, but not all.  The standard repayment term for a home loan is 25 to 30 years.  However, older refinancers who may be in their 40s or 50s may not want a loan period of 30 years, so will choose a lender who offers more flexible terms such as 5, 10, 15 or 20 years.

Should I use a redraw facility on my home loan?

No – not if your goal is to pay your home loan off as soon as you can.  Redrawing the additional payments you’ve made towards your loan will set you back financially in terms of the time it will take you to repay your loan.  However, if you are facing a financial emergency and need funds quickly, using your home loan equity may be preferable to taking out a more expensive personal or car loan, which is likely to come with a higher interest rate.

Can I refinance and shorten my loan term so I can pay off my home sooner?

Yes – refinancing to a shorter loan term is a common way to reduce the amount of interest you’ll pay on your loan.  It makes good financial sense to reduce the term of your loan if you can make higher mortgage repayments.  Use our how long to repay calculator to find out how much you can save by reducing your loan term, but make sure you factor in the additional costs of switching your loan.

Will I have to pay early exit fees if I pay my variable rate home loan off sooner?

No – early exit fees on variable rate home loans were banned in July 2011, so such penalties only apply to fixed rate, fixed term loans.  However, if you do decide to switch home loans, there may be other costs such as application fees to open your new loan.  Loan application fees usually range from $200 to $650.  If you pay off your loan altogether, you may have to pay title discharge and registration fees, which may amount to a few hundred dollars.

If I'm struggling to cover my loan repayments, can I extend the term of my loan?

Yes – if you’re struggling with your home loan repayments, there are options your lender can offer you to help, including refinancing to increase your loan term to reduce your repayments. It’s important to talk to your lender as soon as you realise you may not be able to make a repayment, as lenders can help customers suffering financial hardship or ‘mortgage stress’ as it’s known.

Can I make additional repayments on my fixed rate loan to pay it off sooner?

Potentially – however, many lenders have caps on the dollar amount you’re able to pay off your fixed rate loan ($10,000 a year is common) or only allow you to make a limited number of additional repayments each year.  If you require more loan flexibility, it may make sense to refinance to either a variable rate or a split rate home loan.  Savvy compares loans so you can see for yourself how much you can save by choosing a loan with the lowest possible interest rate.

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