1. What is the Home Loan Repayment Calculator?

This calculator determines your home loan repayments considering an offset account balance and optional extra payments. It helps you understand how these factors affect your monthly payments and overall loan cost.

2. How Does the Calculator Work?

The calculator uses the standard loan repayment formula with offset adjustment:

Where:

• \( P \) — Principal loan amount (USD)
• \( offset\_balance \) — Amount in offset account (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The offset account balance reduces the principal amount that interest is calculated on, while extra payments directly reduce your loan balance.

3. Importance of Loan Repayment Calculation

Details: Accurate repayment calculations help with budgeting, show the impact of offset accounts and extra payments, and can demonstrate potential interest savings over the loan term.

4. Using the Calculator

Tips: Enter your loan amount, offset balance (if any), interest rate, loan term, and any planned extra payments. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does an offset account work?
A: An offset account reduces the loan balance for interest calculation purposes while keeping your money accessible.

Q2: How much do extra payments save?
A: Extra payments directly reduce principal, saving interest and potentially shortening the loan term significantly.

Q3: Should I use offset or make extra payments?
A: Offset provides flexibility (you can withdraw funds), while extra payments typically provide slightly better interest savings.

Q4: Are there limitations to this calculation?
A: This assumes fixed interest rates and consistent extra payments. Actual loans may have variable rates or fees.

Q5: How often should I recalculate?
A: Recalculate whenever your offset balance changes significantly, interest rates change, or you adjust extra payments.