1. What is the Home Loan Extra Repayment Calculator?

The Home Loan Extra Repayment Calculator helps Australian homeowners understand how making additional repayments can reduce their loan term and total interest paid. It's particularly useful for comparing different repayment strategies with major Australian lenders.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Extra Payments: Additional amounts are added to the regular payment to show potential savings.

3. Importance of Extra Repayments

Details: Even small extra repayments can significantly reduce loan terms and interest costs. For example, an extra $100/month on a $500,000 loan at 6.24% could save ~$100,000 interest and reduce term by ~5 years.

4. Using the Calculator

Tips: Enter loan details in AUD, interest rate as percentage (e.g., 6.24), term in years, and any planned extra repayments. Results show both regular and total payments including extras.

5. Frequently Asked Questions (FAQ)

Q1: How do extra repayments save money?
A: Extra payments reduce principal faster, lowering total interest and potentially shortening loan term.

Q2: Are there limits on extra repayments?
A: Some fixed-rate loans limit extra repayments (often $10,000-$30,000/year). Variable loans typically allow unlimited extras.

Q3: Should I reduce term or payment amount?
A: Keeping the same term but paying extra gives flexibility to reduce payments if needed while still saving interest.

Q4: How accurate are these calculations?
A: Estimates assume constant interest rates. Actual results may vary with rate changes or fee structures.

Q5: What's better - extra repayments or offset account?
A: Mathematically similar, but offset accounts offer more flexibility to access funds if needed.