Home Loan Repayment Calculator Auswide

Loan Repayment Formula:

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

Monthly Payment (PMT):

Total Repayment:

Total Interest:

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1. What is the Home Loan Repayment Formula?

The home loan repayment formula calculates the fixed monthly payment required to fully repay a loan over its term, including both principal and interest components. This is the standard formula used by Auswide Bank and most Australian lenders.

2. How Does the Calculator Work?

The calculator uses the loan repayment 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 divided by 12)
\( n \) — Total number of monthly payments (loan term in years × 12)
\( PMT \) — Fixed monthly payment amount (AUD)

Explanation: The formula accounts for compound interest over the life of the loan, calculating a payment amount that will pay off the loan exactly by the end of the term.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly repayment helps with budgeting and assessing loan affordability. It also shows the total cost of borrowing over the loan term.

4. Using the Calculator

Tips: Enter the loan amount in AUD, the annual interest rate (Auswide's current standard variable rate is 6.49% p.a.), and the loan term in years (typically 25-30 years for Australian mortgages).

5. Frequently Asked Questions (FAQ)

Q1: What is Auswide Bank's current interest rate?
A: As of 2023, Auswide's standard variable rate is approximately 6.49% p.a., but this may vary based on product and customer circumstances.

Q2: Are there other costs besides the monthly repayment?
A: Yes, home loans typically include establishment fees, ongoing fees, and possibly lenders mortgage insurance (LMI) if borrowing more than 80% of the property value.

Q3: Can I make extra repayments on an Auswide loan?
A: Most Auswide home loans allow extra repayments, but fixed-rate loans may have restrictions. Check your specific loan terms.

Q4: How does an offset account affect repayments?
A: An offset account reduces the interest you pay by offsetting your savings against the loan balance, potentially shortening the loan term.

Q5: What's the difference between principal & interest and interest-only loans?
A: Principal & interest loans include repayment of the loan amount plus interest, while interest-only loans only cover interest for a set period (typically 5 years).