Home Loan Repayment Formula:
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The home loan repayment formula calculates the fixed monthly payment required to repay a loan over a specified term. This standard formula is used by Australian lenders to determine mortgage repayments.
The calculator uses the standard home loan repayment formula:
Where:
Explanation: The formula accounts for both principal and interest components of the loan repayment, with interest calculated on the reducing balance.
Details: Understanding your exact repayment amount helps with budgeting, loan comparison, and determining how much you can borrow. Even small rate differences can significantly impact total repayment amounts over the loan term.
Tips: Enter the loan amount in AUD, annual interest rate (without % sign), and loan term in years. The calculator will show your estimated monthly repayment amount.
Q1: Does this include other home loan fees?
A: No, this calculates principal and interest only. Additional fees (application fees, LMI, etc.) are not included.
Q2: How does an offset account affect repayments?
A: Offset accounts reduce interest but don't change the repayment amount unless you request the lender to recalculate.
Q3: What's the difference between principal & interest and interest-only?
A: This calculator is for principal & interest loans. Interest-only loans have lower initial payments but don't reduce the principal.
Q4: How often are repayments typically made in Australia?
A: Most Australian home loans offer monthly, fortnightly, or weekly repayment options.
Q5: Can I make extra repayments?
A: Most variable rate loans allow extra repayments, but fixed rate loans may have restrictions.