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Mortgage Payment Formula:
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The mortgage payment formula calculates the fixed monthly payment required to fully amortize a loan over its term. Westpac Bank and other financial institutions use this standard formula to determine home loan repayments.
The calculator uses the standard mortgage payment formula:
Where:
Explanation: The formula accounts for both principal repayment and interest charges, with payments structured so the loan is paid off exactly by the end of the term.
Details: Accurate mortgage calculations help borrowers understand their repayment obligations, compare loan options, and budget effectively for home ownership.
Tips: Enter the loan amount in AUD, annual interest rate as a percentage (e.g., 5.25), and loan term in years. All values must be positive numbers.
Q1: Does this include other home loan fees?
A: No, this calculates principal and interest only. Westpac may charge additional fees like establishment fees or ongoing account fees.
Q2: How does an offset account affect payments?
A: Offset accounts reduce interest charges but don't change the required payment amount unless you request a repayment recalculation.
Q3: What if I want to make fortnightly payments?
A: Fortnightly payments are typically half the monthly amount, resulting in 26 payments per year (equivalent to 13 monthly payments).
Q4: How accurate is this calculator?
A: This provides standard repayment estimates. Actual Westpac loan terms may vary based on product features and your specific circumstances.
Q5: Can I calculate extra repayments?
A: This shows standard repayments. Extra repayments would require a separate amortization calculator to show their impact on loan term and interest.