1. What is the Bankwest Loan Repayment Formula?

The Bankwest loan repayment formula calculates fixed monthly payments for a home loan based on the principal amount, interest rate, and loan term. This formula is standard for amortizing loans where payments remain constant throughout the term.

2. How Does the Calculator Work?

The calculator uses the standard loan repayment formula:

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: The formula accounts for compound interest over the life of the loan, calculating a fixed payment that covers both principal and interest each month.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly repayment helps with budgeting and financial planning. It allows you to compare different loan options and understand the total cost of borrowing.

4. Using the Calculator

Tips: Enter the principal amount in AUD, annual interest rate as a percentage, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to Bankwest loans?
A: While it uses Bankwest's standard calculation method, the formula is generic and applies to most fixed-rate home loans.

Q2: Does this include fees and charges?
A: No, this calculates principal and interest only. Actual loan repayments may include additional fees.

Q3: How does changing the term affect my repayments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms increase monthly payments but reduce total interest.

Q4: What if I make extra repayments?
A: Extra repayments reduce the principal faster, potentially saving interest and shortening the loan term.

Q5: How accurate is this calculator?
A: It provides estimates based on the inputs. For precise figures, consult with Bankwest or your financial advisor.