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Home Loan Repayment Calculator

Monthly principal and interest repayments, total interest and amortisation schedule for any home loan. Free financial calculator for home loan repayment. AU (ATO/...

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Pre-approval came through — now you need to know the actual monthly repayment before signing anything and committing to the long-term obligation.

Home Loan Repayment Calculator
Mortgage
M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ−1] Where P = principal, r = monthly rate, n = total payments.
Key insight: On a $500K loan at 6.5% for 30 years, you pay approximately $640K in interest alone — more than the loan itself.
This is an estimate only. Contact a licensed mortgage broker for personalised advice. ASIC MoneySmart
ℹ️ Results are estimates for planning purposes. Verify with current standards and a qualified professional.

1 What this calculator does

Calculates the monthly principal and interest repayment for any home loan. Enter the loan amount, annual interest rate and loan term in years to see monthly repayment, total repaid over the life of the loan, and total interest cost.

2 Formula & professional reasoning

Monthly repayment = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1] | r = annual rate ÷ 12

This is the standard loan amortisation formula. P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). Early repayments are mostly interest; later repayments are mostly principal. The total interest over the life of the loan can be surprising — often exceeding the original principal.

3 Worked examples

⚠️ Illustrative example only — not clinical or professional instruction.

Basic
$500,000 loan at 6.5% over 30 years
Given: P=$500,000 · r=6.5%/12=0.5417% · n=360
Working: 500000 × [0.005417 × 1.005417³⁶⁰] ÷ [1.005417³⁶⁰ − 1]
Answer: $3,160/month
💡 Total repaid: $1,137,599. Interest cost: $637,599 — more than the original loan.
Standard
$750,000 at 6% over 25 years
Given: P=$750,000 · r=6%/12=0.5% · n=300
Working: 750000 × [0.005 × 1.005³⁰⁰] ÷ [1.005³⁰⁰ − 1]
Answer: $4,823/month
💡 Total repaid: $1,446,900. Reducing the term from 30 to 25 years saves significant interest.
Advanced
$1.2M at 5.89% over 30 years
Given: P=$1,200,000 · r=0.4908% monthly · n=360
Working: Standard formula with current variable rate
Answer: $7,098/month
💡 Illustrative only — check current rates with your lender. Always factor in fees.

4 Sanity check

Monthly repayment rule of thumb
~$6/month per $1,000 borrowed at 6%, 30 years
At 6% over 30 years: $500K ≈ $3,000/month; $800K ≈ $4,800/month.
Repayment-to-income ratio
Banks typically lend to 30–35% of gross income
If your repayment exceeds 35% of gross monthly income, you may face serviceability issues.
Interest-only warning
Principal not reducing
Interest-only loans have lower repayments but no equity built.
Buffer rate
APRA requires banks to assess at floor rate +3%
You must qualify at the test rate, not just the current rate.

5 Common errors

ErrorCauseConsequenceFix
Using annual rate not monthly Entering 6.5% without dividing by 12 Wildly wrong result The formula uses monthly rate = annual rate ÷ 12
Forgetting fees and charges Calculating repayment only Budget shortfall Add lenders mortgage insurance (LMI) if LVR > 80%, establishment fees, ongoing fees
Ignoring rate changes Assuming rate stays fixed Budget shock if rates rise Model repayments at +1%, +2%, +3% above current rate to stress-test your budget
Confusing P&I and interest-only Comparing different loan types Unfair comparison Always compare P&I to P&I for an accurate picture

6 Reference & regulatory links

🇦🇺 Australia
🇺🇸 United States

7 Professional workflow

Common tools used alongside this one:

📋
Stamp Duty Estimator
Calculate stamp duty on top of your deposit and loan costs (AU)
→
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Extra Mortgage Repayment
Model how extra repayments reduce your term and interest
→