Australian Home Loan Calculator 2026
Last verified · Methodology
Enter your loan amount, deposit, interest rate, and term to calculate monthly repayments, total cost, and total interest. Supports both principal-and-interest and interest-only repayment types. Includes an optional offset account for interest savings.
Home Loan Details
Calculations use standard amortisation formula. Does not include Lenders Mortgage Insurance (LMI), lender fees, stamp duty, building insurance, or council rates. Always obtain a credit quote from a licensed credit provider. Does not constitute financial advice.
How the Calculation Works
For a principal-and-interest (P&I) home loan, the monthly repayment is calculated using the standard amortisation formula. Each repayment covers the interest accrued since the last payment, with the remainder reducing the outstanding principal. In the early years most of the repayment is interest; over time a growing share goes to principal.
The formula is: M = P x r(1+r)^n / ((1+r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total months.
For an interest-only loan, the repayment is simply the loan balance multiplied by the annual rate, divided by 12. The principal does not decrease during the interest-only period. Most Australian lenders limit interest-only periods to 5 years for owner-occupiers and 10 years for investors.
Your LVR (Loan-to-Value Ratio) is the loan as a percentage of the property value. An LVR above 80% requires Lenders Mortgage Insurance (LMI). Below 80% LVR you avoid LMI, and below 70% you generally access the best advertised rates.
| Loan Amount | Monthly Repayment | Total Interest |
|---|---|---|
| A$300,000 | A$1,838 | A$361,500 |
| A$400,000 | A$2,450 | A$481,900 |
| A$500,000 | A$3,063 | A$602,500 |
| A$600,000 | A$3,675 | A$723,000 |
| A$750,000 | A$4,594 | A$903,700 |
| A$1,000,000 | A$6,125 | A$1,205,000 |
For a principal-and-interest (P&I) home loan, the repayment uses the standard amortisation formula: M = P x r(1+r)^n / ((1+r)^n - 1), where P is the loan amount, r is the monthly interest rate (annual rate divided by 12), and n is the total number of monthly repayments (years x 12). Each repayment covers accrued interest first; the remainder reduces the principal. For an interest-only loan, the repayment is simply the loan balance multiplied by the annual rate, divided by 12.
The most common home loan term in Australia is 30 years, though terms of 25 years are also popular. Shorter terms (15 to 20 years) reduce total interest paid significantly but increase monthly repayments. Australian lenders generally offer terms from 1 to 30 years. Making extra repayments or using an offset account can reduce the effective term without locking you into a shorter contractual term.
An offset account is a transaction account linked to your home loan. The balance in the offset is subtracted from your outstanding loan balance before daily interest is calculated. For example, a $500,000 loan with $30,000 in an offset account means interest is charged on only $470,000. The offset saves you the interest rate on every dollar sitting in the account. Over a 30-year loan at 6%, a $30,000 offset saves approximately $54,000 in interest and could shorten the loan term by around 2 years.
LMI is required when your Loan-to-Value Ratio (LVR) exceeds 80%, meaning your deposit is less than 20% of the property value. LMI protects the lender (not you) if you default. It can be paid upfront or capitalised into the loan. On a $600,000 property with a 10% deposit ($60,000), LMI can add $10,000 to $15,000 to the total loan cost. Eligible first home buyers may use the First Home Guarantee (FHBG) scheme to borrow up to 95% LVR without LMI.
A fixed rate locks your repayment for an agreed term (typically 1 to 5 years in Australia), giving certainty regardless of RBA cash rate movements. After the fixed period ends, the loan reverts to the lender's standard variable rate. A variable rate moves with market conditions and the RBA cash rate, offering flexibility to make extra repayments and redraw. Split loans combine fixed and variable portions. As of 2026, most Australian borrowers are on variable rates after a period of fixed rates expiring.
Beyond monthly repayments, budget for: stamp duty (transfer duty) payable by the purchaser, which varies by state; conveyancing and legal fees (approximately $1,500 to $3,000); building and pest inspection ($500 to $1,000); lender fees including application and valuation fees; Lenders Mortgage Insurance if LVR exceeds 80%; building and contents insurance; ongoing council rates and strata levies (if applicable); and general maintenance. First home buyers should investigate state government grants and concessions available.