Mortgage Repayment Calculator
Frequently asked questions
Essentially, you are required to make regular minimum repayments that spread the amount you’ve borrowed (your principal), as well as your interest and any fees or charges, over the life of your loan.
The amount that makes up each repayment could depend on a few things, such as:
- Your loan amount, interest rate and term – normally 20-30 years
- Whether you choose Principal and Interest or Interest Only repayments
- Whether you’re an owner occupier or investor
- Your repayment frequency – weekly or fortnightly repays your loan slightly faster than monthly
- Your ability to make regular extra repayments.
How are mortgage repayments calculated?
Your lender will use a formula to calculate repayments over the life of your loan. Your repayments could change over time, based on a number of things, such as changes in your interest rate, if you’ve taken money out of your available redraw balance or if you’ve made additional repayments into your home loan.
The simplest way to estimate your mortgage repayments is to use a mortgage repayment calculator, like the one further up on this page.
For example, say you borrow $400,000 over 30 years. You choose to make Principal and Interest repayments – so each repayment pays off interest charges and some of the amount you borrowed. Assuming you get an interest rate of 3% p.a. for the life of the loan, your estimated monthly repayment would be $1,686, your total interest charged over the loan’s life will be $207,110 and your total repayments over the life of the loan will be $607,110.
In addition to the mortgage repayment calculator, you might also find helpful:
- Our maximum loan calculator, which estimates your maximum ‘borrowing power’ based on your basic income, assets, expenses, credit card debts etc.
- Our affordability calculator, which helps you settle on a minimum repayment amount that you’d feel comfortable paying each week, fortnight or month, until your loan’s paid off.
There are several strategies you could use to pay down your home loan sooner. You can make one-off or recurring extra payments any time (although note there is a $30,000 limit for extra repayments on fixed rate loans before break costs apply3).
If you’re on Principal & Interest repayments, you could increase your weekly, fortnightly or monthly repayment amount or frequency in Online Banking or the Westpac App (for the steps, read our FAQs).
If you choose our Variable Rate Rocket Repay Home Loan, any balance in your linked transaction offset account will count towards reducing the interest on your home loan’s daily interest calculations.
Can I make extra repayments?
Yes you can –we genuinely want you to own your property sooner. You can make unlimited extra repayments on our variable rate loans. You could also make up to $30,000 extra repayments over the duration of a fixed rate loan (additional repayments beyond this limit will incur break costs).3
Making extra repayments could be a good way to ‘buffer’ any future interest rate rises which may result in an increase in your repayments. If you make extra repayments more than the prepayment limit for fixed loans, you will incur break costs.3 Use the ‘Extra repayment’ field in the calculator to see how getting ahead on your repayments could reduce your interest and loan term.
How could a lump sum payment affect the length of my loan?
Making lump sum payments in addition to your minimum regular repayments could be a good way to pay your loan off faster. Each lump sum payment you make could help you pay down the principal balance faster than just making the minimum regular repayments. The faster you reduce your principal, the less interest you pay. If you do this at regular intervals over the life of the loan, you could reduce the loan term and reduce the total amount of interest you pay.
You can use the mortgage repayment calculator above to get an estimation of the effect that a lump sum repayment could have on your regular repayments. Enter your current loan details, then divide your lump sum amount by the number of months left in your loan term. Enter this number into the ‘Want to pay your loan sooner?’ field and see how it changes the ‘extra repayments’ line on the graph.
Keep in mind that you can only make up to $30,000 worth of extra repayments across the term of a fixed rate loan before break costs and fees may apply.3
Your initial loan repayments will be set up as monthly payments. But the more frequently you make your repayments, the more interest you’ll save over the life of your loan, because interest is calculated daily and you may end up making more repayments over the loan term
Principal & Interest (P&I) repayments
You can change your repayment frequency between weekly, fortnightly and monthly anytime. To calculate these, we multiply your monthly amount by 12 to get a yearly value, then divide either by 26 for fortnightly or 52 for weekly, and round it up. You can change frequency through our app and Online Banking – scroll through our FAQs to find out how.
Tip: it’s a good idea to sync your repayment due date with the day after your pay day, so there’s less chance of overspending.
Interest Only repayments
You won’t be able to change your repayment frequency (or amount), but you could make extra one-off or recurring payments to your home loan account anytime. Remember that if you’re paying interest only repayments on a fixed rate loan, the limit of $30,000 in extra repayments over the fixed rate term applies before you’ll have to break costs.3
What’s the benefit of an Interest Only term?
During any Interest Only term, your repayments will be temporarily lower, and if your loan is for an investment property, there may also be potential tax advantages.4
Bear in mind
Compared to Principal & Interest, your interest rate may be higher with Interest only repayments. Remember that Interest Only repayments don’t extend the loan term. This means that when your repayments switch to Principal and Interest after the Interest Only term, they will be higher, as the principal that you didn’t pay will need to be repaid in a shorter time.
Play with the repayment calculator on this page to get a summary graph of your estimated total interest over the life of your loan.
Our calculator lets you:
- Compare Principal & Interest or Interest Only repayment types
- Check how fixed or variable interest affects your loan
- See how weekly, fortnightly or monthly repayments affect your loan
- Test the positive impact of making extra repayments (just add an amount to that field).
How we calculate your interest
Your interest is calculated daily and charged on your monthly repayment due date. Every evening, we’ll multiply your remaining balance by your interest rate and divide it by 365 (or 366) days to calculate your daily interest. Then on your repayment due date, we’ll add up all your daily interest for the period and charge it to your home loan account. If you’re on Interest Only repayments, you pay the monthly accrued interest each month but don’t pay down the principal amount. At the end of the IO period, you will have the same principal amount. This will need to be paid off over a shorter loan term, which means higher repayments for the remaining loan term.
Can I choose fixed interest for the life of my loan?
If you like, you can choose back-to-back fixed rate terms over the life of your loan, simply by re-fixing your home loan at the end of each fixed rate term.
How high could variable interest rates go?
There’s no crystal ball to predict how high interest rates might go. Variable rates are based on a number of factors including market and economic conditions.
Depending on your situation, home loan product, repayment type and interest type, if you need some financial breathing space you may be able to pause or reduce your repayments. Call 132 558 for more details.
You could be eligible to pause repayments if:
- You have a variable rate home loan.
- Your repayment type is principal and interest.
- You’re ahead on your scheduled repayments. Don’t know if you are? Call us on 132 558 to find out.
You should check whether the available funds will cover the payments you wish to skip or reduce. A formal approval process is not required. Loans are to be fully drawn and have more than the scheduled repayments as available funds.
It’s important to weigh up the following factors when requesting Mortgage Repayment Pause:
- You will continue to accrue interest while your repayments are paused.
- The length of your pause is determined by the amounts of extra funds you have in your loan.5
Mortgage repayment reduction allows you to reduce your home loan repayments by 50% for up to 6 months.
You could be eligible for this if:
- You have a variable rate home loan.
- Your repayment type is principal and interest.
- You’ve had your loan for more than 12 months.
- Your loan isn’t subject to Lenders Mortgage Insurance.
- You’re able to pay at least 50% of the minimum repayment amount during your reduced repayment period.
- Your projected limit does not exceed the maximum approved limit. Don’t know if it does? Call us on 132 558 to find out.
- You haven’t missed more than 2 repayments over the last 12 months.
Repayment reductions are available on a variety of our variable loan products. This option is not available on fixed loan products or interest only repayments. Your borrowings must not exceed your maximum approved limit. A formal approval process is required to access your eligibility for this option. Speak to your local Westpac banker or call 132 558 to find out more.
Remember, if you’re ahead on your fixed or variable repayments, you’re also free to redraw additional available funds in your home loan account. Even better, there’s no redraw fee.
Your upfront home loan costs depend on your loan type, and can include (but are not limited to):
- A loan establishment fee
- A loan settlement fee
- Our property valuation fee
- Lenders Mortgage Insurance if you are borrowing more than 80% LVR – estimate yours with our LMI calculator, based on your property value and loan amount.
Other upfront home-buying costs might include:
- Building and pest inspections, which can cost upwards of $500
- Stamp duty (which can’t be included as part of your Westpac home loan.) – estimate yours with our cost calculator
- Government fees like Transfer Duty, the Mortgage Registration Fee and a Land Transfer fee
- Solicitor/conveyancer costs
- Building, home & contents insurance
- Other costs like selling your current property, or breaking a rental lease early.
There may be ongoing property costs too, like insurance and council rates/strata fees. You should factor these in when calculating your mortgage repayments.
Things you should know
The above rates exclude any LVR discounts available for new loans.
*The comparison rate is based on a loan of $150,000 over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
**Premier Advantage Package Conditions of Use apply and are available above. Annual fee, currently $395, applies. Package benefits cannot be taken in conjunction with, or in addition to other special offers, negotiated rates or discounts. Not available to company and trust account holders.
- The output or result of these calculators:
- is subject to the assumptions which are subject to change;
- is prepared without knowing your personal financial circumstances. Before you act on the output of the calculators, please consider if it’s right for you. If you need more information, please call 1300 786 029. We recommend that you consult your financial adviser before taking out a loan;
- does not represent either a quote or pre-qualification for a loan;
- may not be taken into account if you apply for a loan with us as we will make our own calculations. When assessing ability to service a loan, Westpac may use an interest rate that is higher than the current interest rate for the loan requested.
- The interest rates used in the calculator:
- are current, as indicated on our home loan interest rate pages;
- are Westpac's standard interest rates and include any package or promotional discounts; and
- are subject to change.
This information has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice. This includes any tax consequences arising from any promotions for investors and customers should seek independent advice on any taxation matters.
3. Break costs on prepayments and switching: Customers can make total prepayments of up to $15,000 (cumulative) for loans fixed prior to 21 March 2009, $25,000 (cumulative) for loans fixed between 21 March 2009 and 16 March 2012 or $30,000 (cumulative) for loans fixed on or after 17 March 2012, without costs or fees applying. Prepayments exceeding this threshold may incur a break cost and administration fee.
If at any time before the end of a fixed rate period you switch to another product, interest rate (fixed or variable) or repayment type, then a break cost and administration fee may apply.
4. The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation.
5. Reduced loan repayments: It is important to understand that at the end of the reduced repayment period, the repayment amount will increase to adjust for the reduced repayments. This ensures that the loan is still repaid within its original term. Read the disclosure documents for your selected product or service before deciding if this option is right for you.
Credit provided by Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.