Refinance Calculator AU
Table of contents
7 sections
How to calculate home loan repayments before refinancing
Which figures do I need to calculate my repayments?
Find your current loan balance, actual interest rate and years remaining on your statement or in your lender’s account information. The balance is the amount still owed, not the original purchase price or the value of your home. If the original term was 30 years and five years have passed, check the actual remaining term rather than automatically entering another 30 years.
Open the home loan refinance calculator and enter these figures for your current loan. Select monthly repayments to follow the example below. For a proposed refinance, enter the written quoted rate and proposed balance separately. Keep the same remaining term for the initial comparison. Record any extra borrowing so you can distinguish its effect from a rate change.
What is the monthly mortgage repayment formula?
For a constant-rate principal-and-interest loan, the monthly payment is M = P × r ÷ [1 − (1 + r)−n]. Here P is the outstanding principal, r is the annual rate expressed as a decimal divided by 12, and n is the number of monthly payments remaining. For 6%, r is 0.06 ÷ 12 = 0.005. For 25 years, n is 25 × 12 = 300. At a zero interest rate, use P ÷ n instead.
Putting P = $500,000, r = 0.005 and n = 300 into the formula gives $3,221.51 per month, rounded to cents. This is an illustrative mathematical schedule with constant rates, regular monthly periods and no fees. It is not a current lender offer. A lender’s contractual calculation, payment dates and rounding can produce a different figure, so use the repayment schedule in the actual quote when making a commitment.
How much of the payment is interest and how much reduces my balance?
In the first month of this simplified example, interest is $500,000 × 0.005 = $2,500. Subtracting that from the $3,221.51 payment leaves about $721.51 to reduce principal. The balance after that payment is approximately $499,278.49. In the next monthly period the same rate applies to a smaller balance, so the interest portion falls and the principal portion grows.
This process is called amortisation. Dividing $500,000 by 300 gives $1,666.67, but that is only a straight division of principal: it leaves out interest and is not the repayment at 6%. Similarly, calculating one month’s interest alone gives an interest-only amount, not the payment that clears the debt over 25 years. Our main tool models principal-and-interest loans.
How do I use the repayment when comparing a refinance?
Add recurring fees to understand the cost of keeping each loan. If this example also has a $10 monthly account fee and a $300 annual fee, the monthly-equivalent ongoing cost is $3,221.51 + $10 + $25 = $3,256.51. That equivalent spreads the annual fee across 12 months; the actual cash debit can be different in the month the annual fee is charged.
Compare equivalent costs for your current and proposed loans, then include switching costs separately. Read how to calculate refinance savings and use the break-even calculator to estimate how long any saving takes to recover the upfront cost. A smaller repayment is only one part of deciding whether the new loan suits your plans.
What changes my repayment estimate?
| Annual rate | Remaining term | Monthly payment | Total scheduled interest |
|---|---|---|---|
| 6.00% | 25 years | $3,221.51 | About $466,452 |
| 6.50% | 25 years | $3,376.04 | About $512,811 |
| 6.00% | 30 years | $2,997.75 | About $579,191 |
Does extending the loan term save me money?
In the example, moving from 25 to 30 years at 6% reduces the scheduled monthly payment by about $223.76. However, total scheduled interest rises by about $112,739 because repayments continue for five more years. The table uses unrounded monthly calculations for totals. A lower instalment can help cash flow while still increasing the full-term cost. Our refinance calculator uses one shared remaining term; request separate lender schedules if the terms differ.
Can I divide the monthly repayment by two to get a fortnightly payment?
Check the convention first. Paying half the monthly amount every fortnight means 26 half-payments, equivalent to 13 monthly payments per year. In this example that is about $1,610.75 each fortnight. It is an accelerated schedule, not the same annual cash outlay as 12 monthly payments. Our calculator labels that option separately. Standard weekly and fortnightly options use their own payment periods. Confirm the lender’s required payment and calendar rather than assuming every calculator uses the same method.
How do extra repayments or an offset affect the calculation?
The main tool’s same-payment payoff scenario explores keeping the current repayment on the proposed loan. It does not provide an arbitrary recurring-extra-payment input or model changing offset balances. Do not reduce the loan balance to imitate an offset: the debt still exists. For other extra-payment scenarios, use Moneysmart’s mortgage calculator and confirm repayment limits with your lender. Ask for a separate offset illustration when comparing those features.
Why does my bank’s repayment differ from this example?
Check that the balance, rate, remaining term, payment frequency and included fees match. Then check payment dates, the interest calculation convention, rounding and whether the loan contains an interest-only period. The example assumes regular monthly periods and a constant rate. Your lender’s schedule governs the actual payments. Keep a copy of the assumptions so the comparison can be repeated when a quote changes.
Which calculator should I use after checking repayments?
Choose the calculator library for the next decision: the full refinance comparison for ongoing costs, the LVR tool for proposed borrowing relative to value, or the costs tool for break-even. The home loan refinancing checklist helps collect the documents and written quotes. Calculation results do not assess income, expenses or lender eligibility.
Sources and calculator limits
Sources checked on 29 October 2026. Examples use fixed inputs; actual fees, rates, valuations and approval rules can differ. Read the calculator assumptions and limitations. For questions about the site, contact us. About Sana Hosseni and the calculators.
Continue exploring
Where will your next move take you?
Choose the calculator or guide that helps you understand your next refinance decision. Browse all calculators or explore the guides.
Calculators and practical guides
Compare your current loan with a new loan, including repayments, fees and payoff time.
Work out your loan-to-value ratio, equity and distance from 80% LVR.
Estimate your usable equity and the loan amount at your chosen LVR.
Compare two offers against your current loan, including fees and cashback.
Add up switching costs and estimate how long your savings take to cover them.
