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A PRACTICAL GUIDE
On a $600,000 loan at 6% over 30 years, principal and interest repayments are about $3,597 a month ($1,660 a fortnight), and interest over the full term comes to about $695,029. Change the amount, rate and term above to see your own figures.
Principal and interest. Rates are illustrative examples, not current lender offers.
| Loan | 5.5% | 6.0% | 6.5% | 7.0% |
|---|---|---|---|---|
| $400,000 | $2,271 | $2,398 | $2,528 | $2,661 |
| $500,000 | $2,839 | $2,998 | $3,160 | $3,327 |
| $600,000 | $3,407 | $3,597 | $3,792 | $3,992 |
| $750,000 | $4,258 | $4,497 | $4,741 | $4,990 |
| $1,000,000 | $5,678 | $5,996 | $6,321 | $6,653 |
ABS median house sale price, a 20% deposit, 6% (illustrative) over 30 years.
| City | Median house | Loan (80%) | Monthly | Fortnightly |
|---|---|---|---|---|
| Sydney | $1,487,600 | $1,190,080 | $7,135 | $3,293 |
| Melbourne | $850,000 | $680,000 | $4,077 | $1,882 |
| Brisbane | $1,155,000 | $924,000 | $5,540 | $2,557 |
| Perth | $1,010,000 | $808,000 | $4,844 | $2,236 |
| Adelaide | $975,000 | $780,000 | $4,676 | $2,158 |
| Canberra | $1,030,000 | $824,000 | $4,940 | $2,280 |
| Hobart | $750,000 | $600,000 | $3,597 | $1,660 |
| Darwin | $752,500 | $602,000 | $3,609 | $1,666 |
ABS Residential Dwellings median sale prices (Jun 26). A median describes the middle sale, not any particular home. Add stamp duty and other upfront costs to your savings target.
A principal and interest loan is repaid in equal instalments. Each one covers that period’s interest on the remaining balance, and the rest pays down the loan, so early repayments are mostly interest and later ones mostly principal.
Lenders usually quote fortnightly repayments as the monthly amount × 12 ÷ 26. That costs the same over a year. Paying half the monthly amount every fortnight adds the equivalent of one extra monthly repayment a year and pays the loan off sooner.
Interest-only repayments cover the interest and nothing else, so the balance does not fall. When the interest-only period ends, repayments rise because the whole loan must then be repaid over a shorter remaining term.
Lenders mortgage insurance usually applies when you borrow more than 80% of the value, and there are loan fees, stamp duty and conveyancing on top. Offset accounts and extra repayments reduce the interest you pay; this calculator does not model them.