Mortgages calculators

A mortgage is almost certainly the largest single financial commitment you will make. The headline interest rate is the part borrowers focus on, but the real cost is hidden in time: the longer the loan, the more you pay. A 30-year loan at 6% pays back roughly twice the original principal in interest alone — even before fees, insurance, or lifestyle costs.

These calculators are designed to expose that long-tail cost. Plug in a principal, a rate, and a term, and you get a full amortisation schedule: every payment broken into interest and principal, the running balance, and the total interest over the life of the loan. The point is not to scare you away from borrowing. It is to make the trade-off visible so you can shape the loan instead of letting the loan shape you.

Every figure here uses 20-digit decimal arithmetic and the standard amortisation formula used by lenders worldwide. We make no jurisdiction-specific assumptions and add no marketing — the goal is to mirror what a banker's spreadsheet would tell you, with no signup and no sales pitch.

How mortgage repayments work

A standard principal-and-interest mortgage is an amortising loan: each repayment is split between interest charged on the remaining balance and principal that pays the loan down. Early on, the balance is high, so interest dominates; over time, as principal shrinks, more of each payment goes to principal.

The mathematical engine behind the schedule is a single formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is principal, r is the periodic interest rate, and n is the number of periods. From that one equation, every row of an amortisation table follows by recursion — the lender's software is doing the same arithmetic our calculator does, just with a sales layer on top.

An interest-only loan inverts this. You pay only the interest charge each period, the balance never reduces, and at the end of the interest-only window you face the original principal plus the original term in repayments to make on what's left. Interest-only structures suit a narrow set of investor scenarios; for most owner-occupied buyers they are a slow tax on patience.

The true cost of a mortgage

The total interest you pay across a mortgage's life is rarely what borrowers expect. On a $500,000 loan at 6% over 30 years, the total repaid is roughly $1.08 million — interest alone is $580,000, more than the house cost. Drop the rate by 1% and you save around $110,000 in interest. Add 5 years to the term and the saving evaporates.

Two levers control this number: rate and time. A small rate change on a long term has an outsized effect, and a small extra repayment in the first decade compounds for the next two. Many borrowers run their numbers once at application and never run them again — yet the same calculator can show that re-pricing a mortgage every 2–3 years, or trimming the term when income grows, changes the total interest by six figures.

Range-of-rates analysis matters too. Use the calculator to model the same loan at +1%, +2%, and +3% above the rate you were quoted. If your budget collapses at +3%, that is information you needed before signing, not after the first rate cycle.

How to reduce the cost of a mortgage

The four levers that meaningfully reduce total mortgage cost are: a higher repayment frequency, regular extra repayments, a shorter total term, and a lower rate. The first three are within your control without renegotiating the loan; the fourth requires either a refinance or a competing offer to bring to your existing lender.

Switching from monthly to fortnightly repayments — keeping the same per-period dollar amount — sneaks in roughly an extra month of repayments per year, because there are 26 fortnights but only 12 monthly cycles. On a 30-year loan this shaves several years off the term and tens of thousands off the interest. The maths is mechanical: more frequent payments hit a smaller average balance, so less interest accrues between repayments.

Extra repayments work because every dollar applied to principal reduces every future interest charge. A single $5,000 lump-sum repayment in year 1 of a 30-year loan saves roughly $20,000 in interest by maturity, depending on the rate. Use the extra-repayment calculator to test where in the loan extra payments give you the best return — almost always, the answer is "as early as possible".

Choosing the right loan structure

Beyond rate and term, mortgage products differ along several axes: fixed vs variable rate, repayment frequency, offset and redraw, principal-and-interest vs interest-only, and split structures that mix two or more of the above. Each axis is a trade-off, not a winner.

Fixed rates buy certainty but charge a premium for it; if rates fall during the fix, you pay the cost of being wrong. Variable rates expose you to rate hikes but typically come with lower fees and more flexibility around repayments. A split loan — half fixed, half variable — is the most common compromise. Use the affordability calculator to stress-test a variable structure at a rate 2–3% higher than today's; if the budget breaks, fix more.

The most underrated decision is the term itself. A 25-year term at the same rate as a 30-year term costs about 12% more per repayment but roughly 25% less in total interest. If your income can absorb the higher repayment, the shorter term is almost always cheaper.

How much can you borrow?

Affordability is a function of three numbers: your income, your existing debts, and the lender's serviceability buffer. Most lenders calculate a debt-to-income ratio and stress-test the loan at a rate 2–3 percentage points above the actual offer to ensure you can survive a rate cycle.

A useful rule of thumb is that total housing costs (mortgage repayments, insurance, taxes, maintenance) should not exceed 30% of gross income. Above 35%, you become "house-poor": every other financial goal — investing, retirement, education for children — gets squeezed by mortgage cash flow. Use the affordability calculator to find the loan size that keeps total housing costs at a comfortable fraction of your post-tax income, not the absolute maximum a lender will lend you.

The amount a lender will offer is rarely the amount you should borrow. Lenders optimise for their own credit risk, not your financial flexibility. The calculator gives you the second number — what you can comfortably service — alongside the first.