How to calculate home loan repayments

Loans.com.au loan repayment calculator allows you to find out which frequency of home loan repayments will work best for you based on the type of loan you choose.

Your mortgage is one of the things you need to pay on a regular basis. As well as repaying the principal, you are also paying interest on the outstanding balance of the loan. For this reason, you can save on interest if you repay the loan quickly. One way to do this is by increasing the frequency of home loan repayments.

Paying Home Loan Repayments: Monthly vs. Fortnightly

The usual frequency of payments is monthly. But you can increase it to twice a month or fortnightly to quickly cut down the amount of what you owe. You may think that paying bi-monthly is just too much for your budget, but take a look at the example below to find out which payment frequency is better for you:

Let’s say your standard monthly payment is $2,000. By the end of the year, you would have paid $24,000 ($2,000 x 12 months). If you pay every fortnight, just divide your home loan repayment into two. That makes it $1,000 per fortnight. By the end of the year, you would have paid $26,000 ($1,000 x 26 fortnights). That’s one extra payment per year. This additional payment will not only reduce your loan term, it can also save you thousands of dollars in interest and other charges.

You can use a loan repayment calculator to find out which frequency of home loan repayments will work best for you. It will show you an estimate of what your repayments are likely to be. It can calculate the total interest paid for each repayment scheme so you can compare interest amounts. Keep in mind that the results of the loan repayment calculator should only be considered as a guide.

So which frequency of repayments is best? If you want to save money on interest and fees, as well as pay off the loan sooner, consider increasing the frequency of your home loan repayments. Remember that your mortgage is influenced by a lot of factors so make sure to talk to an expert before making a decision.

 
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