Home Loan Repayment Calculator

Principal and interest

Principal and Interest repayments means that your repayments cover your principal (amount borrowed), plus interest on the outstanding principal, as well as fees and government charges. This is the most common kind of repayment type.

Depending on the structure of your loan, when you first buy a new home, you’ll often be paying off a smaller amount of the principal. But near the end of your loan, you’ll have less interest to pay, so a higher percentage of your loan balance will go towards paying off principal.

Interest-only repayments

You can structure your loan so that for a period of time between 1-5 years, your repayments cover only the interest portion of your home loan, plus any fees – therefore the amount you’ve borrowed doesn’t change as you make repayments. This set-up can be helpful if you need more cash flow to pay off other debts, or if you’re taking some time off work and have a reduced income.

After the set period of time, you’ll automatically switch to paying the principal and interest, and your repayment amount will increase, to ensure your loan is paid within the original term. So, the longer the interest only period, the higher your repayments.

It’s also important to note that the interest rate on interest-only repayments is higher than on principal and interest repayments.

We have a range of interest rates – compare our current rates across different types of Westpac home loans.

You get to choose which type of rate you’d like for your home loan. For example, you could choose a one year fixed rate up to five years fixed rate, a variable rate, which means your rate can go up or down according to market changes, or a mix of the two which is called a split home loan.

How much of my mortgage repayment is interest?

Play with the repayment calculator on this page to get a summary graph of your estimated total interest over the life of your loan.

Our calculator lets you:

• Compare Principal & Interest or Interest Only repayment types
• Check how fixed or variable interest affects your loan 
• See how weekly, fortnightly or monthly repayments affect your loan 
• Test the positive impact of making extra repayments (just add an amount to that field). 

How we calculate your interest 

Your interest is calculated daily and charged on your monthly repayment due date. Every evening, we’ll multiply your remaining balance by your interest rate and divide it by 365 (or 366) days to calculate your daily interest. Then on your repayment due date, we’ll add up all your daily interest for the period and charge it to your home loan account. If you’re on Interest Only repayments, you pay the monthly accrued interest each month but don’t pay down the principal amount. At the end of the IO period, you will have the same principal amount. This will need to be paid off over a shorter loan term, which means higher repayments for the remaining loan term. Read more about interest-only home loans.

Can I choose fixed interest for the life of my loan?

If you like, you can choose back-to-back fixed rate terms over the life of your loan, simply by re-fixing your home loan at the end of each fixed rate term. 

How high could variable interest rates go? 

There’s no crystal ball to predict how high interest rates might go. Variable rates are based on a number of factors including market and economic conditions. 

When it comes to home loans, or mortgages, you have a few different choices.

There’s our Flexi First Option home loan, which is a variable rate home loan. That means that the interest rate is variable, rising and falling in line with market interest rate changes. 

One of the benefits of a variable rate home loan is that you can make extra repayments as often as you like, with no early repayment fees or break costs. You could also choose a variable home loan with an offset account, which is an everyday bank account attached to your home loan. Any money in an offset account balances against what you still owe on your home loan, which means you’ll only pay interest on your loan balance minus your daily offset balance. For example, if you had a $450k home loan and $50k in your offset, you’ll only pay interest on $400k. Read more about offset accounts. Note that offset accounts aren’t available on every type of variable rate home loan – at Westpac, you can add an offset to our Rocket Repay home loan, but not to our Flexi First Option home loan.

With our Fixed Options home loan, interest rates are different depending on the term you choose, between 1-5 years. A fixed rate home loan means you have certainty that the interest you pay won’t change over that time. Note that repaying a fixed rate loan before the end of the term may mean you incur break costs.^{^^} With our Fixed Options home loan, you can make up to $30k additional repayments within the fixed loan term without incurring break costs. 

Alternatively, split your home loan into separate accounts so that it is partly fixed, partly variable. You can choose how much to put in each account. For this scenario, you’ll need to make two separate calculations on the home loan repayment calculator above.

Use the mortgage repayment calculator on this page to get a graph, table and summary of your estimated home loan repayments and total interest – based on your home loan amount, your loan type and the interest rate you think you'll be paying.

Then, together with the rest of your budget, you'll start to see whether you can realistically afford the home you want to buy.

When does my home loan repayment start?

Your first repayment’s normally due within the first month of settlement – you’ll find your repayment due date in your home loan contract and Online Banking.

How do I manage my repayments?

A Westpac home loan is designed to evolve with you, so you can become mortgage-free sooner. As life changes, you and any other borrowers can manage your home loan in the Westpac App and Online Banking: make extra repayments, change your repayment frequency, redraw and more.

Essentially, you are required to make regular minimum repayments that spread the amount you’ve borrowed (your principal), as well as your interest and any fees or charges, over the life of your loan. 

The amount that makes up each repayment could depend on a few things, such as:

• Your loan amount, interest rate and term – normally 20-30 years
• Whether you choose Principal and Interest or Interest Only repayments
• Whether you’re an owner occupier or investor
• Your repayment frequency – weekly or fortnightly repays your loan slightly faster than monthly
• Your ability to make regular extra repayments.

How are mortgage repayments calculated? 

Your lender will use a formula to calculate repayments over the life of your loan. Your repayments could change over time, based on a number of things, such as changes in your interest rate, if you’ve taken money out of your available redraw balance or if you’ve made additional repayments into your home loan.

The simplest way to estimate your mortgage repayments is to use a mortgage repayment calculator, like the one further up on this page. 

For example, say you borrow $400,000 over 30 years. You choose to make Principal and Interest repayments – so each repayment pays off interest charges and some of the amount you borrowed. Assuming you get an interest rate of 3% p.a. for the life of the loan, your estimated monthly repayment would be $1,686, your total interest charged over the loan’s life will be $207,110 and your total repayments over the life of the loan will be $607,110.

In addition to the mortgage repayment calculator, you might also find helpful:

• Our maximum loan calculator, which estimates your maximum ‘borrowing power’ based on your basic income, assets, expenses, credit card debts etc.
• Our affordability calculator, which helps you settle on a minimum repayment amount that you’d feel comfortable paying each week, fortnight or month, until your loan’s paid off.

There are several strategies you could use to pay down your home loan sooner. You can make one-off or recurring extra payments any time (although note there is a $30,000 limit for extra repayments on fixed rate loans before break costs apply^{^^}). 

If you’re on Principal & Interest repayments, you could increase your weekly, fortnightly or monthly repayment amount or frequency in Online Banking or the Westpac App (for the steps, read our FAQs).

If you choose our Variable Rate Rocket Repay Home Loan, any balance in your linked transaction offset account will count towards reducing the interest on your home loan’s daily interest calculations.
 

Calculate how much you could save with an offset account.

Can I make extra repayments?

Yes you can –we genuinely want you to own your property sooner. You can make unlimited extra repayments on our variable rate loans. You could also make up to $30,000 extra repayments over the duration of a fixed rate loan (additional repayments beyond this limit will incur break costs).^{^^}

Making extra repayments could be a good way to ‘buffer’ any future interest rate rises which may result in an increase in your repayments. If you make extra repayments more than the prepayment limit for fixed loans, you will incur break costs.^{^^} Use the ‘Extra repayment’ field in the calculator to see how getting ahead on your repayments could reduce your interest and loan term.

How could a lump sum payment affect the length of my loan?

Making lump sum payments in addition to your minimum regular repayments could be a good way to pay your loan off faster. Each lump sum payment you make could help you pay down the principal balance faster than just making the minimum regular repayments. The faster you reduce your principal, the less interest you pay. If you do this at regular intervals over the life of the loan, you could reduce the loan term and reduce the total amount of interest you pay. 

You can use the mortgage repayment calculator above to get an estimation of the effect that a lump sum repayment could have on your regular repayments. Enter your current loan details, then divide your lump sum amount by the number of months left in your loan term. Enter this number into the ‘Want to pay your loan sooner?’ field and see how it changes the ‘extra repayments’ line on the graph. 

Keep in mind that you can only make up to $30,000 worth of extra repayments across the term of a fixed rate loan before break costs and fees may apply.^{^^}

Your initial loan repayments will be set up as monthly payments. But the more frequently you make your repayments, the more interest you’ll save over the life of your loan, because interest is calculated daily and you may end up making more repayments over the loan term

Principal & Interest (P&I) repayments

You can change your repayment frequency between weekly, fortnightly and monthly anytime. To calculate these, we multiply your monthly amount by 12 to get a yearly value, then divide either by 26 for fortnightly or 52 for weekly, and round it up. You can change frequency through our app and Online Banking – scroll through our FAQs to find out how.

Tip: it’s a good idea to sync your repayment due date with the day after your pay day, so there’s less chance of overspending.

Interest Only repayments

You won’t be able to change your repayment frequency (or amount), but you could make extra one-off or recurring payments to your home loan account anytime. Remember that if you’re paying interest only repayments on a fixed rate loan, the limit of $30,000 in extra repayments over the fixed rate term applies before you’ll have to break costs.^{^^}

What’s the benefit of an Interest Only term?

During any Interest Only term, your repayments will be temporarily lower, and if your loan is for an investment property, there may also be potential tax advantages.¹

Bear in mind

Compared to Principal & Interest, your interest rate may be higher with Interest only repayments. Remember that Interest Only repayments don’t extend the loan term. This means that when your repayments switch to Principal and Interest after the Interest Only term, they will be higher, as the principal that you didn’t pay will need to be repaid in a shorter time. 

Depending on your situation, home loan product, repayment type and interest type, if you need some financial breathing space you may be able to pause or reduce your repayments. Call 132 558 for more details. 

You could be eligible to pause repayments if:

• You have a variable rate home loan.
• Your repayment type is principal and interest.
• You’re ahead on your scheduled repayments. Don’t know if you are? Call us on 132 558 to find out.

You should check whether the available funds will cover the payments you wish to skip or reduce. A formal approval process is not required. Loans are to be fully drawn and have more than the scheduled repayments as available funds.

It’s important to weigh up the following factors when requesting Mortgage Repayment Pause:

• You will continue to accrue interest while your repayments are paused.
• The length of your pause is determined by the amounts of extra funds you have in your loan.²

Mortgage repayment reduction allows you to reduce your home loan repayments by 50% for up to 6 months.

You could be eligible for this if:

• You have a variable rate home loan.
• Your repayment type is principal and interest.
• You’ve had your loan for more than 12 months.
• Your loan isn’t subject to Lenders Mortgage Insurance.
• You’re able to pay at least 50% of the minimum repayment amount during your reduced repayment period.
• Your projected limit does not exceed the maximum approved limit. Don’t know if it does? Call us on 132 558 to find out.
• You haven’t missed more than 2 repayments over the last 12 months.

Repayment reductions are available on a variety of our variable loan products. This option is not available on fixed loan products or interest only repayments. Your borrowings must not exceed your maximum approved limit. A formal approval process is required to access your eligibility for this option. Speak to your local Westpac banker or call 132 558 to find out more.

Remember, if you’re ahead on your fixed or variable repayments, you’re also free to redraw additional available funds in your home loan account. Even better, there’s no redraw fee.

Your upfront home loan costs depend on your loan type, and can include (but are not limited to):

• A lending establishment fee
• A document processing fee 
• Our property valuer fee 
• Lenders Mortgage Insurance if you are borrowing more than 80% LVR – estimate yours with our LMI calculator, based on your property value and loan amount.

Other upfront home-buying costs might include:

• Building and pest inspections, which can cost upwards of $500
• Stamp duty (which can’t be included as part of your Westpac home loan.) – estimate yours with our cost calculator 
• Government fees like Transfer Duty, the Mortgage Registration Fee and a Land Transfer fee
• Solicitor/conveyancer costs
• Building, home & contents insurance 
• Other costs like selling your current property, or breaking a rental lease early. 

There may be ongoing property costs too, like insurance and council rates/strata fees. You should factor these in when calculating your mortgage repayments.