1. What is the Westpac Home Loan Repayment Formula?

The Westpac home loan repayment formula calculates the fixed monthly payment required to repay a loan over a specified term. It's based on the standard annuity formula and accounts for compound interest.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

• \( P \) — Principal loan amount (AUD)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( n \) — Total number of payments (years × 12)
• \( PMT \) — Monthly repayment amount (AUD)

Explanation: The formula calculates the fixed payment needed to pay off a loan with interest over time, where each payment covers both principal and interest.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly repayment helps with budgeting, comparing loan options, and assessing affordability before committing to a mortgage.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate (%), loan term in years, and select loan type. The calculator will show your estimated monthly repayment.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between fixed and variable rate calculations?
A: Fixed rates remain constant during the fixed term, while variable rates can change. This calculator assumes the entered rate remains constant.

Q2: Does this include Westpac's fees and charges?
A: No, this calculates principal and interest only. Additional fees may apply to your actual loan.

Q3: How accurate is this calculator?
A: It provides a good estimate, but actual repayments may vary based on specific loan terms and rate changes.

Q4: Can I calculate fortnightly or weekly repayments?
A: For fortnightly, divide monthly by 2. For weekly, divide monthly by 4.33. Or adjust 'n' and 'r' accordingly.

Q5: What if I make extra repayments?
A: Extra repayments reduce principal faster, potentially shortening loan term and reducing total interest.