CommBank Investment Property Loan Calculator

Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

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1. What is the CommBank Investment Property Loan Calculator?

This calculator helps estimate monthly repayments for Commonwealth Bank investment property loans using the standard loan payment formula. It's particularly useful for investors considering CBA's typical investment property loan rate of 6.24% p.a.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Principal loan amount (AUD)
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Total number of payments (loan term in years × 12)
\( PMT \) — Monthly payment amount (AUD)

Explanation: This formula calculates the fixed monthly payment required to fully repay a loan over its term, including both principal and interest components.

3. Importance of Loan Calculation

Details: Accurate loan payment estimation is crucial for investment property planning, helping investors assess affordability and cash flow requirements before committing to a loan.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate (default is 6.24%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical interest rate for CBA investment property loans?
A: As of current market conditions, CBA's investment property loans typically start around 6.24% p.a., but rates vary based on LVR and other factors.

Q2: Does this include other loan costs?
A: No, this calculates principal and interest only. Additional costs like establishment fees, LMI, and property taxes are not included.

Q3: How does interest-only period affect payments?
A: This calculator assumes principal-and-interest repayments. Interest-only periods would result in lower initial payments.

Q4: Can I use this for owner-occupied loans?
A: While the formula works, owner-occupied loans typically have lower interest rates than investment loans.

Q5: How accurate is this calculator?
A: It provides a good estimate, but actual loan offers may vary based on your specific circumstances and CBA's current pricing.