Mortgage Repayment Calculator
What is a mortgage repayment calculator?
A mortgage repayment calculator is one of the many home loan repayment calculator options Mortgage House makes available to its customers. One of the great things about the modern mortgage market is home buyers have access to a large range of tools and resources before they even apply for a loan. That information can help you work out how much your repayments may be as well as how much you might be able to borrow. You can also discover how much stamp duty you will pay as part of a home loan and how much you can save by switching mortgages. You can even use our website to work out how you can tweak your budget to save for a deposit, as well as how to find the best interest rates available from our large range of home loans.
A mortgage repayment calculator can give you a lot of important information to help you find a suitable home loan, including:
- Repayment amount. The most important thing a mortgage repayment calculator does is let you know how much your mortgage repayments may be for specific loans – including weekly, fortnightly or monthly repayments.
- Repayment makeup. A mortgage repayment calculator will also tell you how much of your mortgage repayment may be made up of the principal amount and interest.
- Total interest. A mortgage repayment calculator will also give you a total interest amount, which is the full amount of interest you are likely to pay over the loan term.
To get this information, you need to fill in some important information, information you can gain from any of Mortgage House’s home loan options, including:
- Loan Amount. This is how much you wish to borrow from Mortgage House. Remember that most banks and lenders will lend up to 80% of the value of the property you are looking to buy, unless you choose a Low Deposit Home Loan or consider Lenders Mortgage Insurance. Also, remember to factor in Stamp Duty and any extra fees and charge you might encounter over the loan term.
- Loan Period. You can choose how long you take out a mortgage for. The longer you choose the less the weekly, fortnightly or monthly repayments will be, but the more total interest you will pay.
- Loan Type. There are two main types of home loans when it comes to mortgage repayments – interest only and principal and interest. Our mortgage repayment calculator will adjust all the equations to suit your choice.
- Introductory Rate. Some home loans have an introductory rate, which is an interest rate amount you will pay for a set period. This is usually a lower interest rate, and after an agreed period the home loan will return to a higher interest rate, with repayments adjusting accordingly.
Important Disclaimer: This is intended as a guide only. Details of terms and conditions, interest rates, fees and charges are available upon application. Mortgage House’s prevailing credit criteria apply. Please note that your actual fortnightly repayment would be equal to the monthly repayment amount divided by two. Weekly repayments would equal the monthly repayment amount divided by four. If you choose to pay fortnightly or weekly, your actual repayments will be higher than repayments shown on this page. You can reduce the term of your loan if you choose to make repayments fortnightly or weekly. We recommend you seek independent legal and financial advice before proceeding with any loan.
How to calculate mortgage repayments?
A mortgage repayment calculator gives you the flexibility of being able to get an indication of what your mortgage repayment may be before you apply for any home loan product. There are two main types of mortgage repayment options, and you can choose either with our mortgage repayment calculator.
- Interest Only. Some home loan product options give you the flexibility of interest only repayments, which means for an agreed period – up to 10 years – you only pay back the interest amount of the home loan. This option is popular for property investors, who aim to sell the property for a profit before the end of the interest-free period.
- Principal and Interest. With these home loan products, repayments are made up of both the principal amount and the interest, over the life of the loan.
Make sure you are aware of the terms and conditions of both kinds of repayments. If you choose interest only repayments, and don’t repay the full home loan before the end of the interest free period, your repayment amount can increase significantly. That is where budgeting well and being prepared is important.
Another important budgeting tip our mortgage repayment calculator can help you out with is whether to make weekly, fortnightly or monthly repayments. If you choose weekly or fortnightly repayments you may save money over the life of the loan. For example, if your mortgage repayments are $4,000 a month, then you will pay back $48,000 per year. Some banks and lenders will make fortnightly repayments, in this instance, $2,000 (half a month) and weekly $1,000 (a quarter of a month). That means that over a year, if you choose weekly or fortnightly repayments, you will pay back $52,000, a whole extra monthly repayment each year. This can help you pay your loan off sooner and pay less interest.
If you are unsure how the data you’re presented with by our mortgage repayment calculator fits in with your budget, we can help you out there, too. Our Budget Calculator (below) can help you bring all your income and expenses together in one easy-to-use place. It will calibrate everything into the right time periods (weekly, monthly etc) and give you an idea of how you can handle mortgage repayments in the future. If you chose a variable interest rate loan, it is important to remember to budget for any possible future increases in interest rates. That can save you any unexpected shocks.
How do I reduce mortgage repayments?
There is no one secret way to reduce your mortgage repayments, but one way to reduce how much you pay over the life of the loan is to make extra repayments whenever you can. Even a small amount extra here and there can add up to a lot over a 30-year life of a loan. That can save you thousands of dollars in interest in the long run. Reduce the term of the loan with our mortgage repayment calculator to see how much you could save over the life of the loan, remembering there may be fees and charges for paying it off early. Check the terms and conditions of each loan you’re looking at choosing from all the details.
Another way to possibly reduce your mortgage repayments is by choosing a home loan product with an offset account.
An offset account allows you to link a non-interest-bearing bank account to your mortgage. Interest is calculated on the difference between the two accounts, rather than just the mortgage account. This can reduce the interest component of your repayments.
The type of home loan product you choose can also affect the size of your mortgage repayments, because of the amount of interest you pay. There are two main types of home loans when it comes to interest:
- Variable Rate: A Variable Rate home loan means the interest rates can increase or decrease over the life of your loan. Variable interest rates tend to be lower than comparable contemporary fixed interest rates.
- Fixed Rate. A Fixed Rate loan means your interest rate will stay the same for an agreed period, usually between 1 and 5 years.
Choosing a variable or fixed rate at the right time can make a difference to how much your repayments are. Which one you choose, and when, can be a tough decision. If official interest rates are low, does that mean that it is a good time to choose variable? But if they have been low for a long time, does that mean they may rise soon, making a fixed rate option attractive? These are all the discussions to have with your financial advisors.
Our expert lenders can help identify suitable fixed and variable interest rate loans for you. Use our mortgage repayment calculator to adjust the interest rate levels of suitable loans to see the differences they can make in repayment amounts. Make sure you understand the Product Disclosure Statement of each loan option so you’re aware of all the terms and conditions and requirements of you as a borrower in these circumstances.
Does the mortgage repayment calculator provide exact details?
A mortgage repayment calculator is only as good as the information you put into it. Enter the loan amount, loan period, interest rate, loan type and whether or not the loan you are considering an introductory rate, and you’ll get an indication of what your mortgage repayment timetable will be.
The important word there is indication. A mortgage repayment calculator only can act as a guide to what the repayments may be. It is also not pre-approval but is a good way to work out how a mortgage repayment may fit in with your budget. The only way to get an exact figure is to apply for a home loan and let our mortgage experts take you through the process.
A Comparison Rate is a figure banks and lenders are required, by law, to display next to regular interest rates. They take into consideration fees and charges of each individual loan, and how that may impact the loan over its life.
Another important part of a mortgage repayment calculator is the loan amount. Working out how much you want to borrow is one thing but getting an indication of how much a bank or lender may lend you is another. That’s why a Borrowing Calculator (below) is yet another great resource for Mortgage House customers. It allows you to discover your possible borrowing power, which can help you narrow down, or even expand, your property search. And you can use that figure in your mortgage repayment calculator to see how it impacts your budget.
How to repay your mortgage faster?
While a home loan repayment calculator can help you work out what your repayments may be, finding out how to repay your mortgage faster can require you to delve a bit deeper into a home loan product. Most Mortgage House home loans come with a range of features that can help you pay off your home loan faster. They include:
- Additional Repayments. Making extra repayments is a key part of any strategy to pay off your home loan faster. Mortgage House offers a range of home loans that don’t penalise you for making additional repayments, helping you pay off your loan faster and save thousands in interest.
- Redraw. A Redraw feature can make it easier to make regular additional repayments. For some people, the thought of regular additional repayments can be overwhelming and uncertain. With a Redraw feature, you can make extra repayments, but access them whenever you wish. You don’t have to use the money for anything related to your home or home loan, and as long as the minimum repayments have been met, you can withdraw any extra repayments you have made.
- Offset Accounts. An Offset Account can also help your repayments. It is a feature that allows you to use a non interest bearing bank account as a way to pay less interest. Interest is calculated on the difference between the two accounts, potentially saving you thousands over the life of your loan. You can use the savings to make additional repayments, helping you pay off your home loan sooner.
- Lump Sum Payments. While this is not a feature of a home loan, it is a way to pay it off faster. If you get a nice tax return, get a pay rise or inherit some money, putting it on your mortgage can have benefits down the track. And if your home loan product has a Redraw feature, you can still access it if you need it.
Mortgage House’s expert lenders can help you answer all your mortgage questions and find suitable home loan products to help you reach your property goals. That’s because we are determined to work closely with you every step of the way. We don’t treat you as a number and our proprietary technology and processes makes the application process safe, secure, seamless and simple.