Home Mortgage Rate Calculator Australia

Mortgage Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

Total Payment:

Total Interest:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Mortgage Payment Formula?

The mortgage payment formula calculates the fixed monthly payment required to fully amortize a loan over its term. It's the standard calculation used by Australian banks and lenders to determine home loan repayments.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( PMT \) — Monthly payment amount
\( P \) — Principal loan amount (AUD)
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Total number of payments (loan term in years × 12)

Explanation: The formula accounts for compound interest over the life of the loan, ensuring each payment covers both principal and interest.

3. Importance of Mortgage Calculation

Details: Understanding your mortgage payments helps with budgeting, comparing loan products, and making informed decisions about loan terms and amounts.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate as a percentage (e.g., 5.25), and loan term in years. The calculator will show monthly payment, total repayment amount, and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: How accurate is this calculator?
A: This provides standard principal-and-interest payment calculations. Actual payments may vary slightly due to rounding or specific lender policies.

Q2: Does this include other home loan costs?
A: No, this calculates only the principal and interest. You should also consider stamp duty, insurance, and other fees.

Q3: How does changing the loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest. Longer terms reduce monthly payments but increase total interest.

Q4: What's the difference between variable and fixed rates?
A: Fixed rates stay the same for a set period, while variable rates can change. This calculator assumes a fixed rate for the entire term.

Q5: How often are payments typically made in Australia?
A: Most Australian home loans offer monthly, fortnightly, or weekly payment options. This calculator shows monthly payments.