Loan Repayment Calculator
How much do you expect to pay for a monthly repayment amount every month? Your exact home loan repayment figure will vary on the terms of the loan and your circumstances.
However, you must make sure that your loan repayments are affordable. Paying too much money towards loan payments each month can result in likely payment defaults and consequential mortgage stress.
Your home loan repayment amount consists of a principal amount and an interest amount. Together, your principal and interest repayment amounts make your home loan repayment instalment.
You may also need to pay lender’s mortgage insurance if your deposit is below 20% of the property value. This will be an extra cost for you to pay every month until your lender thinks you have sufficient equity on the property.
You will also need to consider what type of home loan you want when buying a home. Do you want a fixed interest rate loan or a variable interest rate loan? Alternatively, are you interested in a split-rate loan?
Use Odin Mortgage’s Home Loan Repayment Calculator and discover how much your loan repayment is likely to be each month! Customise your home loan for your situation, achieving an affordable loan repayment!
What’s Included In My Home Loan Repayment?
Your home loan repayment will typically include a principal repayment and an interest repayment. You could also be asked to pay lenders mortgage insurance in some circumstances.
These costs are included in home loans for Australian Expats, as well as resident Australians.
But, what are these costs, and why are they included in my home loan repayment?
Your principal repayment is the portion of your monthly home loan repayment that directly reduces the money you have borrowed. Every dollar you pay in principal repayments will be paid off your home loan balance.
Your lender may allow you to pay extra instalments of principal repayments to clear your home loan balance faster. However, some lenders place a cap on the number of extra payments made each year and may charge a fee.
The remaining portion of your home loan instalment is the interest repayment. This money is the interest you are paying to your lender based on the home loan balance you borrowed. None of this money reduces the amount of money you owe the lender, however.
Some homebuyers choose to secure interest-only loans to reduce the amount of money they pay each month. Your lender could allow you to only pay the interest owed on your home loan, although your home loan balance will not decrease.
Lender’s Mortgage Insurance
Some home loan instalments will include lender’s mortgage insurance as well as principal and interest repayments. Lender’s mortgage insurance, or LMI, is sometimes a requirement by a lender if your deposit falls under 20% of the property’s value.
LMI is an additional chunk of money that you will need to pay every month for a while. Your lender may ask that LMI is paid until your equity has surpassed 20% of the property value.
However, all lenders are different and have varying requirements. Using Odin Mortgage’s services, we will negotiate a great home loan deal that you will love!
How Much Can I Borrow for My Australia Home Loan?
The amount of money you can borrow for your Australian home loan will depend on your borrowing power. You can discover your borrowing power using our specialist Borrowing Power Calculator to start your home loan journey!
Borrowing power is calculated using Net Surplus Income. This calculation adds your income from all sources together and then deducts all ongoing liabilities and living expenses.
The total that remains is the money that the lender assumes you can spare to pay your home loan repayment each month. You can increase your borrowing capacity for your home loan by increasing your income and decreasing your outgoings.
Proving your overseas income to get an Australian mortgage as an Aussie Expat can be difficult in some situations, depending on the country you are working in. Our Expat experts at Odin Mortgage know how to prove your overseas income whilst maximising your borrowing power! Secure the highest home loan value with Odin Mortgage!
How Much Will My Monthly Repayments Total?
Use our expert Loan Repayment Calculator today to discover how much your loan repayments will total each month!
To use our home loan repayment calculator, enter your loan amount, interest rate, and loan term. You can also choose your repayment frequency and whether a loan fee is applicable. You will see instantly the monthly repayment you will need to pay.
It is a wise move to keep your home loan repayments below 30% of your total monthly income, however. Therefore, if you earn $5,000 per month after taxes, try to keep your home loan repayments below $1,500 per month.
Remember to be careful with introductory interest rates, however. Whilst you may enjoy a temporary lower monthly repayment, once the interest rate reverts to a higher rate you could pay more than expected!
If your loan repayments are too high, you may struggle to maintain payments. Defaulting your home loan and entering mortgage stress is a situation that you should avoid.
Is a Fixed Interest Rate More Expensive Than a Variable Interest Rate?
Usually, a fixed interest rate is more expensive than a variable interest rate as you are paying for the security a fixed deal brings. But, how do fixed interest rates and variable interest rates compare, and is there a compromise?
Fixed Interest Rate
You can agree to a fixed interest rate for a set number of years, usually up to 5 years. You will pay a fixed interest rate of around 4% – 5% to secure such a home loan deal.
However, you can feel comfortable knowing how much your home loan repayments will cost during that period.
Fixed interest rate deals do have their limitations, however. You will be tied into the deal for the entire period agreed, and will not be allowed to switch to a different rate. A fee may be payable if you do decide to switch.
Variable Interest Rate
Variable interest rates are much more flexible, with interest rates reaching around 2% – 3%. This makes your home loan repayment much cheaper than a fixed interest rate deal.
However, your interest rate will rise and fall, making your repayments unpredictable and difficult to budget. One factor that impacts variable interest rates is the Reserve Bank of Australia and the recent hike in the cash rate.
You are free to switch deals when you are on a variable interest rate deal, however. There are no fees to pay when you switch, making this a great choice for homeowners who keep up to date with interest rate forecasts!
Check out the latest comparative deals for home loan interest rates now at Odin Mortgage!
Split Interest Rate
A compromise between choosing a fixed interest rate and a variable interest rate is to opt for a split rate home loan deal. A split rate effectively cuts the home loan into two portions. One portion is given a fixed interest rate and one portion acquires a variable interest rate.
With a split rate home loan deal, you have the security of a fixed interest rate along with the lower costs of a variable interest rate!
Can I Pay Higher Home Loan Repayments?
Most home loan lenders allow you to pay additional home loan repayments. When you pay extra repayments, you can clear your home loan sooner and shave years off your loan duration! The amount of interest you pay is reduced, saving you money!
For example, let’s say your loan amount is $500,000 with a 3% interest rate and a 30-year loan term. How much do you think you could save if you pay an extra $100 per month?
You could save $13,565 in loan interest and clear your home loan 19 months earlier!
Calculate the benefits of paying extra repayments on your mortgage today with Odin Mortgage!
Contact Odin Mortgage Now!
Frequently Asked Questions
How will I use the home loan repayment calculator?
Enter the following information to use the home loan repayment calculator:
- Loan amount
- Interest rate
- Loan term
- Repayment frequency
- Loan fee (if applicable)
You will see the monthly repayment for the home loan details you entered! Alter the information in the calculator and see what home loan terms will suit you!
How can a mortgage broker help me?
Odin Mortgage brokers act as a third party to secure you a great home loan deal. Our service is completely free for you to use, so what have you got to lose?! We are Australian Credit Licence holders so you know you can rely on us!
Australian home loans for Expats are our specialty so get in touch today! We can help you regardless of your situation so request a call back from one of our professionals now!
Will my mortgage payments rise?
Your mortgage payments may rise depending on the applicable variable rate across the repayment period. Variable interest rates will vary and so your mortgage repayments may rise over time.
A fixed rate home loan will not experience a rise during the agreed term. However, be careful with upfront costs, initial interest, and other bank fees before you agree to a home loan deal. You could pay more over time once all costs are added together!