Home
Back
Home Loan Payment Formula:
| From: | To: |
The home loan payment formula calculates the fixed monthly payment required to fully repay a loan over its term, including both principal and interest components. This is the standard formula used by ANZ and most other lenders.
The calculator uses the standard loan payment formula:
Where:
Explanation: The formula accounts for compound interest over the life of the loan, calculating a fixed payment that will pay off both principal and interest by the end of the term.
Details: Understanding your monthly payment helps with budgeting and ensures you can comfortably afford the loan. It also shows the total cost of borrowing (total interest paid) over the life of the loan.
Tips: Enter the loan amount in dollars, the annual interest rate (current ANZ rates are typically 6-8%), and the loan term in years (usually 15-30 years for home loans).
Q1: Does this include ANZ's fees and charges?
A: No, this calculates principal and interest only. ANZ's loan establishment fees, monthly account fees, and other charges are not included.
Q2: How accurate is this calculator?
A: It provides accurate estimates for fixed-rate loans. For variable rate loans, payments may change if interest rates change.
Q3: Can I calculate payments for different frequencies?
A: This shows monthly payments. For fortnightly payments, divide the monthly amount by 2 (but check with ANZ as some lenders calculate differently).
Q4: How can I reduce my total interest paid?
A: Making extra repayments, choosing a shorter loan term, or securing a lower interest rate will reduce total interest.
Q5: Does ANZ offer interest-only periods?
A: Yes, ANZ offers interest-only periods (typically 1-5 years) where payments are lower, but this calculator assumes principal+interest payments.