Mortgage calculator Australia

How the payment is calculated in Australia

Australian lenders calculate interest daily on the balance and add it to the loan each month. You can repay weekly, fortnightly or monthly; interest-only loans are repaid monthly, usually for up to 5 years on a home you live in. Rates can be variable or fixed, typically for 1 to 5 years. Lenders mortgage insurance, usually charged when the deposit is under 20%, is a one-off premium paid at settlement or added to the loan.

For equal payments, the calculator uses the annuity formula: payment = loan × i ÷ (1 − (1 + i)^−n), where i is the interest rate for one payment period and n is the number of payments. Each payment first covers that period’s interest, and the rest reduces the balance.

Sources: Westpac, Commonwealth Bank, Insurance Council of Australia.

Principal and interest or interest-only

Principal and interest repayments clear the loan over its term. Interest-only repayments cover just the interest, usually for up to 5 years on a home you live in; after that, repayments rise to repay the loan over the remaining term. About 22% of new housing loans in the March 2026 quarter were interest-only. This calculator treats the whole term as interest-only when you choose it.

Weekly, fortnightly or monthly

Australian lenders let you repay weekly, fortnightly or monthly; interest-only loans are usually repaid monthly. Interest is calculated daily on the balance and added to the loan each month. This calculator divides the yearly rate by the number of repayments a year, so its figures are an estimate.

Lenders mortgage insurance

Lenders usually charge LMI when your deposit is less than 20% of the price. It is a one-off premium, paid at settlement or added to the loan. The cost depends on the lender, the loan and your deposit, and there is no public rate table, so enter the quote from your lender. Under the Australian Government’s 5% Deposit Scheme, eligible first home buyers can buy with a 5% deposit and avoid LMI, within price caps for each state.

Council rates, strata and insurance

Council rates are set by your council from the assessed value of the property: in Knox, Victoria, a home valued at $750,000 pays $1,111.95 for 2026/27. Strata levies are worked out yearly and usually paid quarterly, so enter them per quarter. Building insurance is not required by law but can be a condition of the loan.

What goes into the payment

The headline figure is the principal and interest you pay the lender each period. Tick Include running costs to add the property costs you enter: yearly and quarterly amounts are converted to the payment period and added to the total. One-off costs, such as an insurance premium or guarantee fee paid up front, appear in the breakdown but not in the regular payment. Purchase taxes and closing costs are not included.

In Australia they are council rates, building insurance and strata levies, which are usually paid quarterly. Lenders mortgage insurance is a one-off premium, not a running cost.

How mortgages differ between countries

Most of the 21 countries here apply the yearly rate ÷ 12 to the balance each month. Canada compounds fixed rates twice a year, Belgian law converts the yearly rate to an equivalent monthly rate, Swiss lenders charge simple interest each quarter, Danish mortgage-credit loans follow quarterly bond payments, and some Austrian and Finnish loans count actual days ÷ 360. Lenders in Australia, New Zealand and the UK calculate interest daily.

The equal-payment annuity is standard almost everywhere. Sweden usually repays a fixed share of the original loan each year, so payments fall over time, and Belgium, the Netherlands, Norway, Finland, Iceland and New Zealand also offer equal-principal loans. In Germany you choose the first year’s repayment rate and the loan length follows. Swiss loans only need to be repaid down to two thirds of the property’s value, and Icelandic indexed loans have a balance that rises with inflation.

Monthly payments are the norm. Canada offers six schedules, including accelerated bi-weekly and weekly payments; Australia and New Zealand allow weekly and fortnightly payments; Sweden, Denmark and Italy allow quarterly payments, Italy also half-yearly; and Swiss interest is due each quarter.

In the United States, France, Italy and Spain the rate often lasts for the whole loan. Elsewhere it is usually fixed for a shorter period, such as a term of 5 years or less in Canada or 10 years in the Netherlands, and then reset; the calculator shows the balance when that period ends.

Mortgage insurance paid by the borrower is rare outside North America and Australia. US lenders may require monthly PMI with less than 20% down; Canadian and Australian buyers with a smaller deposit pay a one-off premium; New Zealand banks add a margin to the rate; the Dutch NHG and the Finnish state guarantee charge a one-off fee; and Danish mortgage-credit loans carry an ongoing contribution fee.

Outside the United States, property tax is never a percentage of the purchase price. It depends on a band, an assessed or cadastral value or a local rate, so the calculator asks for the yearly amount in every country.

Frequently asked questions