23 Feb 2021

If You’ve Never Used a Home Loan Calculator, Start Here…

If You’ve Never Used a Home Loan Calculator, Start Here


Purchasing a home is one of the most important financial moments of your life. 


This is due in large part because the home loan you choose can mean the difference in thousands upon thousands of dollars in repayment.


Yet finding the right type of home loan isn’t always as simple as it should be.


Luckily, using home loan calculators can help you discover the perfect choice for your situation. But even these calculators can add to the confusion when they aren’t properly explained.


So, if you’re considering a home loan and would like some much-needed clarity, start right here…


Two Home Loan Calculators are Better Than One


Choosing the best home loan is all about having the best information. To acquire that information, use two calculators:

  1. The ‘How Much Can I Borrow?’ Calculator
  2. The Mortgage Repayment Calculator


How Much Can I Borrow?


Break out the ‘How Much Can I Borrow?’ Calculator when it’s time to narrow down your mortgage choices or real estate options.


This specialised tool helps you discover your buying power.


Here’s how it works:

  1. Plug in the interest rate for the loan. Check out interest rates for different loans or get an idea of the average interest rate by clicking here.
  2. Decide how long the loan period will be. Most home loans are either 15 or 30 years.
  3. Select whether you’ll be applying for yourself or with a partner, then choose the number of dependents.
  4. Input the net income per year for yourself and your partner, plus any additional income per year. Your incomes should reflect the number after taxes.
  5. Input all monthly expenses, such as credit card payments and monthly bills.


The ‘How Much Can I Borrow?’ Calculator will show you the amount up to which you can borrow and what a monthly repayment amount would look like at that amount.


Mortgage Repayment Calculator


A great mortgage repayment calculator will show you how much your payment will be for three different payment types:

  • Weekly, or 52 payments per year
  • Fortnightly, or 26 payments per year
  • Monthly, or 12 payments per year


To discover your repayment amount, plug in some basic loan information:

  1. The interest rate of the loan
  2. The loan amount, or how much you’re trying to borrow
  3. The loan period
  4. The loan type: Principal & Interest or Interest Only


For a principal and interest loan, each repayment is made toward both the principal amount of the loan and the interest of that loan.


An interest only loan means the borrower only pays back interest for an agreed-upon time period. This is a popular choice for real estate investors who aim to sell the property for profit before the end of the interest-only period.


To access a comprehensive mortgage repayment calculator and see how much your monthly, fortnightly, or weekly repayment amount would be, click right here.

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