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Mortgage Repayment Calculator Australia

Australia's free home loan calculator. See your monthly mortgage repayments, total interest paid, and how extra payments can save you years off your loan. Works for fixed and variable rate home loans.

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Australian mortgages — what makes them different?

Australia's mortgage market has some quirks that set it apart from most other developed countries. Understanding them helps you make better decisions when comparing loans.

The most significant difference: Australia is a variable-rate country. About 80% of Australian mortgages are on variable rates, meaning when the Reserve Bank of Australia (RBA) raises or cuts the cash rate, your repayments change — usually within a month. In the US and much of Europe, 30-year fixed rates are standard, insulating homeowners from rate movements. Australians have no such luxury.

Australia also has unusually high household debt relative to income. At around 185% debt-to-income, Australian households are among the most indebted in the world. This makes the property market highly sensitive to interest rate changes — as many borrowers discovered during the 2022–23 rate-hiking cycle.

🦘 Fun fact: The "Great Australian Dream" of homeownership was largely a post-WW2 invention. Before the 1950s, most Australians rented. Government-backed loans for returned servicemen and suburban land releases created the homeownership culture we still live with today.

Frequently asked questions

How are Australian mortgage repayments calculated?

Australian mortgage repayments use the standard amortisation formula. For a $600,000 loan at 6.2% over 30 years, the monthly repayment is approximately $3,665. Most lenders charge interest monthly (annual rate ÷ 12). Your repayment stays fixed, but the split between interest and principal changes each month — early repayments are mostly interest, later ones mostly principal.

How much do extra repayments save on an Australian mortgage?

The savings are substantial. On a $600,000 loan at 6.2% over 30 years, an extra $500/month saves approximately $155,000 in interest and cuts the loan term by ~8 years. Every extra dollar reduces your principal — which is what interest is charged on — so savings compound over time. Even $200–$300 extra per month can save tens of thousands.

What is an offset account and how does it reduce mortgage interest?

An offset account is a transaction account linked to your mortgage. Your savings balance is "offset" against your loan, and interest is only charged on the difference. A $600,000 loan with $50,000 in offset means you pay interest on $550,000. The money stays fully accessible — unlike extra repayments, which are locked in (except via redraw). Most Australian variable rate loans include a 100% offset account.

Should I choose fixed or variable rate in 2026?

Variable rates give flexibility — extra repayments, offset accounts, and benefit from RBA rate cuts. Fixed rates offer certainty but typically come with break costs and no offset. As of early 2026, the RBA has begun easing, which makes fixing less attractive if cuts continue. About 80% of Australian borrowers choose variable. If cash flow certainty matters more than flexibility, a 1–2 year fixed period can help you plan repayments confidently.

Do fortnightly repayments actually save money?

Yes — but only if the fortnightly amount is half your monthly payment. That gives you 26 half-payments per year, equal to 13 monthly payments instead of 12. That extra payment reduces principal faster. On a $600,000 loan at 6.2%, true fortnightly repayments typically save $30,000–$50,000 in interest and cut 2–3 years off the loan. Beware: some lenders charge "fortnightly" by dividing annual repayments by 26 (the same total) — no benefit at all.

How much deposit do I need for a mortgage in Australia?

The minimum is 5% of the purchase price, but anything below 20% triggers Lenders Mortgage Insurance (LMI) — typically $10,000–$30,000 extra. A 20% deposit avoids LMI entirely. First home buyers may access the First Home Guarantee (5% deposit, no LMI, government-backed) if income and property price meet the scheme thresholds. Use our LMI Calculator to estimate the cost on a smaller deposit.

How Australian mortgage repayments work

When you take out a home loan in Australia, your mortgage repayment calculator needs to account for several factors unique to the Australian market. Most Australian mortgages use monthly principal and interest repayments, where each payment covers a portion of the loan balance plus the interest charged that month.

The standard amortisation formula calculates a fixed monthly repayment that stays the same over the life of the loan. However, the split between principal and interest changes with every payment. In the early years, most of your repayment goes toward interest. Over time, more goes toward paying down the actual debt.

Australian lenders typically assess your ability to repay at a rate 2–3 percentage points above the actual rate — known as the serviceability buffer. This means even if your rate is 6%, the bank tests whether you can afford repayments at 8–9%. Use our borrowing capacity calculator to see how much a lender might approve.

Fixed vs variable home loan rates in Australia

Choosing between a fixed and variable rate home loan is one of the biggest decisions Australian borrowers face. About 80% of Australian mortgages are on variable rates, which move in response to the Reserve Bank of Australia's (RBA) cash rate decisions.

Variable rate loans offer flexibility — you can make unlimited extra repayments, use an offset account, and benefit immediately if the RBA cuts rates. The downside is uncertainty: when rates rise, your repayments increase, sometimes significantly.

Fixed rate loans lock in your interest rate for a set period (usually 1–5 years). You get repayment certainty, which helps with budgeting. The trade-offs include break costs if you refinance early, limited extra repayments (usually capped at $10,000–$20,000/year), and no offset account on most fixed products.

Many borrowers split their loan — fixing a portion for certainty while keeping the rest variable for flexibility. If you're considering refinancing your current home loan, use our refinance calculator to estimate potential savings. To see how RBA rate changes affect your repayments, try the rate rise impact calculator.

Related calculators:

Borrowing Capacity Refinance Calculator Rate Rise Impact LMI Calculator Stamp Duty Offset Calculator