How to Calculate Mortgage Repayments

When shopping for a mortgage it is a good idea to use a mortgage repayment calculator.

A mortgage is an essential financial product allowing people to buy a home without paying the entire amount upfront. Mortgages are offered by a variety of lenders at different interest rates and on different terms, which means your loan amount will be paid in instalments differently based on your chosen lender.

Most mortgages are paid for over 25-30 years and are secured against your property. If you can’t make the mortgage repayments, your lender can sell your home.

As a borrower, it’s imperative that you know the components that make up your mortgage repayments because it gives you a grasp of what you’re paying for every month.  

What is a mortgage repayment calculator?

When shopping for a mortgage it is a good idea to use a mortgage repayment calculator. This financial tool will tell you the amount of your mortgage repayments on a weekly, fortnightly, or monthly basis over the life of your mortgage.

Using a repayment calculator is helpful in many ways such as:

  • It will help you know if you’re getting the most competitive rate for your home loan since it’s easier to compare with a mortgage repayment calculator.
  • You’ll know how much you need to pay in interest over the life of your loan.
  • It’s easier to budget so you know if you can afford to borrow and repay the loan.
  • It will help you decide if it’s a wise decision to refinance your home loan.

Calculating your mortgage repayment with our mortgage repayment calculator is easy. You just need to indicate your:

  • Principal: Also referred to as the amount you wish to borrow from your lender. Obviously, the higher the value, the higher the repayment.
  • Interest rate: You need to consider the type of rate for you mortgage whether it’s variable or fixed rate. A variable rate means that your rate will increase and decrease over time, while a fixed rate means that your rate is fixed for a period. Take note that mortgage repayment calculators often assume that it’s the same rate for the entire loan term.
  • Loan term: Typically, you are defaulted to a 30-year term when you apply. Some people are not aware that they can actually request a shorter term, like 15, 20, or 25-years.
  • Payment frequency: This is the schedule of your loan repayments. There are different frequency types. You can repay your loan on a weekly, fortnightly or a monthly basis.
  • Payment type: You can also choose what you want to cover in your repayments. Either a principal and interest repayment, or an interest-only repayment.
  • Upfront fees: These are fees charged prior to the commencement of the loan. Note that different lenders will have different sets of upfront fees.
  • Ongoing fees: Ongoing fees may include monthly account and annual package fees. does not charge any ongoing fees.

Keep in mind that a mortgage repayment calculator can only give you an estimate of your repayments, and this serves only as your reference. It may be different once you apply formally for a home loan.

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