Mortgage & Loan Calculator

How to use

Enter your loan amount, the annual interest rate, and the term in years. The calculator instantly shows your fixed monthly payment, the total you'll pay over the life of the loan, and the total interest. Add a monthly overpayment to see how much interest it saves and how much sooner you'd be mortgage-free. Expand the year-by-year breakdown to see how each year's payments split between principal and interest.

How loan payments work

A standard repayment mortgage or loan is fully amortizing: you pay the same amount every month, and by the final payment the loan is paid off completely. Each payment covers the interest accrued on the current balance, and whatever is left reduces the principal.

The formula behind it is:

M = P × [ r(1 + r)ⁿ ] / [ (1 + r)ⁿ − 1 ]

where M is the monthly payment, P is the principal, r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments. If the rate is zero, the payment is simply the principal divided by the number of months.

Worked example

Suppose you borrow $600,000 at 6% over 30 years — an illustrative loan for Australia, not a rate quote. The monthly rate is 6% ÷ 12 ≈ 0.5000%, and there are 360 payments. The formula gives a monthly payment of about $3,597. That single figure is where every comparison below starts.

What does 30 years of interest actually cost?

The monthly payment is what you qualify on; the total interest is what the loan costs you. They point in opposite directions, and the same $600,000 at 6% makes the point plainly:

• 30-year term: about $3,597 a month, roughly $1,295,029 paid in total — $695,029 of interest.
• 20-year term: about $4,299 a month, roughly $1,031,661 paid in total — $431,661 of interest.

A payment 19% higher saves $263,368 of interest. That trade — monthly cash flow against lifetime cost — is the single biggest decision in the whole mortgage, and it is the one the year-by-year breakdown above is there to make visible. Expand it and look at the first year: on the 30-year loan, only about $7,368 of your first twelve payments touches the principal.

How much does overpaying save?

Put an amount in the Monthly overpayment field. It is added to every payment and goes straight off the balance, so each later month is charged interest on a smaller sum. Your contractual payment doesn't change; the loan simply ends sooner.

On the $600,000 example, an extra $300 a month takes total interest from $695,029 to $547,614 — a saving of about $147,415, with the loan cleared 5 years 5 months early (24 years 7 months instead of 30 years).

Variable-rate Australian loans usually allow unlimited extra repayments, and an offset account achieves the same saving while keeping the money accessible. Fixed-rate loans often cap extra repayments and charge break costs beyond the cap.

Before committing spare cash to the mortgage, it's worth pricing the alternative: the same $300 a month invested instead is the comparison that decides it. Roughly, overpaying wins when your mortgage rate beats the return you realistically expect after tax; investing wins when it doesn't. At 6% that is close enough to be worth calculating rather than assuming.

Can this tell me what I can afford?

It answers the question from the other end — it tells you what a given loan costs per month, not what loan your income supports. Either way, start with what your pay leaves after income tax and the Medicare levy, decide what share of that you're prepared to commit to housing, then raise the loan amount here until the payment hits that ceiling.

Leave room when you do it. The payment shown here is principal and interest only; in Australia you also pay council rates, strata levies for units, home insurance, and lenders mortgage insurance (LMI) if your deposit is under 20%. A payment that exactly fills your budget on this page is a payment you can't afford.

Tips and common mistakes

• Remember the extras. This shows principal and interest only — council rates, strata levies for units, home insurance, and lenders mortgage insurance (LMI) if your deposit is under 20% come on top.
• Compare total interest, not just the monthly payment. A longer term lowers the monthly payment but usually costs far more in total interest.
• Small rate differences matter. On a large, long loan, even 0.5% changes the total cost by tens of thousands. Shop around.
• Check how overpayments are applied. Make sure extra money reduces the balance rather than just prepaying next month — and know your lender's overpayment allowance.