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Calculating your home loan repayments

Calculating your home loan repayments

Choosing the right home loan can seem almost as challenging as finding a suitable home. The good news is that with RateCity’s repayment calculator for home loans, help is at your fingertips – literally!

With the repayment calculator for home loans you simply punch in the amount you wish to borrow, the interest rate and the loan term, and the calculator will generate a wide selection of home loans for review.

If you need to cut the list, the calculator lets you tinker with the payment frequency (weekly, fortnightly, or monthly) or select a ‘fixed’ or ‘variable’ rate home loan. With the repayment calculator for home loans there’s also the option to choose ‘principal and interest’ or ‘interest only’ repayments.

Variable Mortgage Loan

With a variable mortgage loan the amount of interest paid is dictated mostly by the lender. However the lender’s rates also often reflect changes to the official cash rate, which is determined monthly by the Reserve Bank of Australia.

The major appeal of a variable mortgage loan is its flexibility and the ability to make additional repayments whenever you want.

Fixed Mortgage Loan

If rising interest rates keep you awake at night, then a fixed mortgage loan may be suitable. These home loans let you fix the interest rate for one to five years. Consequently, fixed loans provide financial security if rates go up, but are problematic if they dive.

Principal and Interest (P&I) repayments

With P&I repayments, the regular home loan payments are higher than with an interest-only loan. Choosing a P&I strategy is worth considering if you’re planning on owning your home outright.

Interest-only repayments

Interest-only payments won’t let you make a dent in the principal, but you’ll enjoy lower repayments. Normally, interest-only repayments are suited to investors chasing growth and who can claim the interest component of their loan repayments as a tax deduction.  

Finally, in a first for home loan customers, RateCity’s repayment calculator for home loans lets you choose a home loan from a lender and then it will give you an estimate of the interest and fees you’ll pay. This is a great feature to help you compare home loans.

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