Extra Repayment Calculator

Your minimum repayment is calculated so the loan is repaid exactly at the end of the term, with interest charged on the balance the whole way. Pay anything above the minimum and the balance drops faster than the schedule assumes, so every subsequent interest charge is calculated on a smaller number. The saving compounds: on a $500,000 loan at 5.75% with 25 years to run, an extra $200 a month saves roughly $62,356 in interest and pays the loan off about 3 yrs sooner - the worked example above shows the same figures straight from the calculator.

If you're still working out what your base repayment would be, our Loan Repayment Calculator covers repayments across monthly, fortnightly and weekly frequencies, interest-only periods and accelerated repayments. For more ways to get ahead, see our guide to paying off your mortgage faster.

Extra repayments and an offset account attack the same thing - the balance you're charged interest on - from different directions. Extra repayments permanently reduce the principal, while an offset balance is subtracted from the loan before interest is calculated but stays accessible if you need it. Dollar for dollar the interest saving is the same, which is why the right mix is usually about flexibility rather than maths: money you might need back belongs in the offset, money you won't belongs on the loan. Most simple calculators model one or the other; the calculator above models both together, so you can see what your offset balance and a regular extra repayment do as a combined strategy.

A single lump sum - a bonus, a tax refund, an inheritance - can do surprising damage to a loan because it starts saving interest immediately and never stops. Paying a one-off $20,000 onto the same $500,000 loan saves about $58,801 in interest and cuts around 2 yrs 1 mo off the term, without changing your minimum repayment. The earlier in the loan it lands, the bigger the effect, because it has more years of interest to avoid. Use the One-off Lump Sum field above, on its own or alongside a regular extra repayment, to see both together.

Variable-rate loans almost always allow unlimited extra repayments, but most fixed-rate loans cap extras at around $10,000 to $30,000 a year, with break costs if you exceed the cap or pay the loan out early. If part of your loan is fixed, check the cap before setting up a big regular extra. Also confirm how your lender treats extras: as straight principal reduction or as a redraw balance you can access later - both save the same interest, but redraw rules differ between lenders. And if your rate itself is the problem, extra repayments aren't the only lever: our Refinance Calculator shows whether switching to a sharper rate would save more than paying extra on your current one.