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How do home loan repayment calculators work?

Jodie Humphries avatar
Jodie Humphries
- 4 min read
How do home loan repayment calculators work?

Before you take out a home loan (or if you’re still trying to figure out how much you can afford to spend), you’re going to want to have a really good handle on how much it’s going to cost you. That way, you can create a household budget to ensure you can comfortably meet your mortgage repayments and not get yourself into any hot water down the track.

An easy way to work out your financial obligations is by using a home loan repayment calculator. This tool takes into account a range of factors, including loan amount, loan term, interest rate, repayment increments, additional repayments, repayment types and home loan type, to give you the most accurate estimates on how much you can expect to pay, both periodically and over the life of your loan. By using in-built formulas that do the calculations for you, this tool will ultimately save you the time and hassle of crunching the numbers yourself.

What are home loan repayments?

Before we talk home loan repayment calculators, let’s first clarify what home loan repayments are. 

Home loan repayments are the amounts of money a person pays to their lender, periodically over an agreed timeframe, to repay their mortgage. Every person’s home loan repayments will be different as they have a unique loan amount, loan term and interest rate. It’s possible to make additional repayments to pay off the loan sooner and save on interest.

What can a home loan repayment calculator calculate?

Based on the information you input into a home loan repayment calculator, it can spit out several calculations. These include: 

  • How much your estimated repayments will be (weekly, fortnightly or monthly)
  • The total cost of your home loan
  • How much interest you’ll be paying over the life of your loan
  • How long it will take to pay off your home loan

Some repayment calculators also calculate the: 

  • Cost of fees
  • Effects of making extra repayments (regularly or as a lump sum)
  • Effects on the loan’s total cost by switching to interest-only repayments for a limited time.

As well as laying out financial figures for you, you can also use home loan repayment calculators to work out how much you can afford to borrow.

How to use a home loan repayment calculator

Every home loan repayment calculator is unique but you can typically get results by taking the following steps: 

  1. Enter your loan amount e.g. $350,000
  2. Enter your loan term e.g. 30 years
  3. Enter your preferred interest rate e.g. 2.54%
  4. Select your repayment type (principal and interest or interest only)
  5. Select a repayment frequency (weekly, fortnightly, monthly)
  6. Select the loan type (owner-occupier or investment).

Keep in mind that these calculations don’t include the cost of fees and other charges that you may have to pay as part of your home loan. They also assume that the mortgage interest rate will remain the same over the home loan’s full term, whereas, in reality, changes to variable interest rates could affect the cost of your repayments.

What else should I consider before applying for a home loan?

Beyond how much you’ll have to pay, there are other things you should consider before taking out a home loan. It may be wise to ensure that: 

  • Your loan repayments don’t take up more of your income than you can manage (you need to make sure you can meet your repayments as well as all your other financial obligations)
  • You allow for an approximate 2 per cent interest rate increase when calculating how much you can afford to make in repayments, so you know you’ll likely be covered if you need to start paying more
  • You’ve saved a deposit and can demonstrate a savings history over a three- to six-month period
  • You can provide financial documents, such as pay slips, bank statements, bills, and rental receipts
  • You’re informed about all associated fees, charges and ongoing costs
  • You’re aware of extra costs such as mortgage insurance and stamp duty
  • You understand the product disclosure statement.

Start off on the right foot by visiting RateCity’s home loan comparison and mortgage repayment calculator tools.

RateCity's Home Loan Repayment Calculator


Repayment Calculator

Calculate what your repayments could be on your home loan.

Home loan stamp duty calculator

Calculate the total government fees due on your property purchase.


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Product database updated 23 Jul, 2024

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.