Estimate payments on a mortgage balance
This calculator estimates principal-and-interest or interest-only payments from a mortgage balance, annual interest rate, remaining term and payment frequency. It supports monthly, fortnightly and weekly schedules. The rate is an assumption you enter, not a live bank offer. Use the balance expected at the start of the scenario, especially when comparing a future refix rather than the original amount borrowed.
Principal-and-interest payments are calculated to reduce the modelled balance to zero over the entered term at a constant rate. Interest-only payments cover interest at that rate and leave the original principal outstanding. The remaining-principal output makes that distinction explicit. A lower interest-only payment does not mean the same debt is being repaid more cheaply; it represents a different repayment pattern.
How the amortisation formula works
The model divides the annual rate by the number of payments per year to obtain a periodic rate. It multiplies years by that same frequency to obtain the number of payments. The standard annuity formula then finds a constant payment whose discounted value equals the opening balance. When the interest rate is zero, the calculation simply divides the principal by the number of payments, avoiding a division-by-zero formula failure.
For a $120,000 loan over ten years at zero interest with monthly payments, the result is $1,000 per month. At 6% on an interest-only basis, the monthly payment is $600 and the principal remains $120,000. For a $100,000 principal-and-interest loan at 6% over thirty years, the estimated monthly payment is $599.55. These examples demonstrate the model rather than a lender's contractual repayment quote.
Weekly and fortnightly choices
Weekly uses 52 periods per year and fortnightly uses 26. Each is calculated as its own amortising schedule. The calculator does not take a monthly payment and divide it by four or two. Some lenders describe an accelerated arrangement in which half a monthly payment is made every fortnight, creating the equivalent of an additional monthly payment over a year. That arrangement differs from the ordinary fortnightly schedule modelled here.
Before comparing the result with a bank's calculator, check which convention it uses. A discrepancy can reflect frequency treatment rather than incorrect arithmetic. Also check whether the lender accrues interest daily, how it rounds payments and when the first payment occurs. This model uses a regular periodic-rate approximation and does not reproduce every contractual daily-interest calculation.
Remaining term matters
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At refix, use the remaining loan term rather than automatically starting a new thirty-year period. Extending the term can lower the required payment while increasing the period over which interest is paid. If you are comparing a proposed term extension, run it as a separate scenario and compare both payment and total interest. Otherwise the lower payment can conceal a materially different repayment plan.
The total-interest output assumes the entered rate remains unchanged for the entire term. A mortgage fixed for a shorter period will normally require another rate decision later. The displayed lifetime total is therefore a constant-rate scenario, not a prediction of all future interest charges. Compare it with higher- and lower-rate scenarios to see how sensitive the result is.
Interest-only limits
In interest-only mode, total interest is the periodic interest payment multiplied by the modelled number of periods. The principal is still due and is shown separately. The tool does not assume that a lender will offer interest-only terms for the whole period entered. Eligibility, maximum interest-only duration and the payment required when principal repayment begins must be checked with the lender.
For a household budget, consider what happens when interest-only payments end. The same outstanding principal then has fewer years available for repayment if the final maturity date is unchanged. Run a separate principal-and-interest scenario using that remaining period. Treating today's interest-only payment as the permanent cost can understate future cash requirements even if the interest rate never rises.
Costs outside the repayment
The output excludes establishment fees, legal costs, valuations, insurance, rates, body-corporate charges and maintenance. Those costs can matter to affordability even though they are not part of the amortisation formula. A mortgage payment that fits within a current rent budget does not automatically imply the whole cost of ownership will fit. Add the relevant ownership costs separately.
It also excludes offset-account balances, revolving-credit behaviour, extra repayments and early-repayment charges. If you regularly hold cash in an offset account, the effective interest calculation may differ from applying the full rate to the entire stated balance. Use the lender's specific product calculation for that arrangement rather than expecting this simple loan model to reproduce it.
Checking a quote
Record the balance, nominal annual rate, term, frequency and repayment type. Compare those inputs with the lender's proposal before comparing the amount. If the payment differs, ask about daily interest, rounding, fees financed into the balance and the first-payment date. The calculator is most useful as a transparent reasonableness check whose assumptions can be reproduced, not as a replacement for the loan contract.
Frequently asked questions
Is fortnightly just half the monthly payment?
Not here. The tool calculates a separate schedule with 26 payments a year. Accelerated half-monthly arrangements can produce different results.
Does interest-only repay the loan?
No. The original principal remains outstanding in this model. Check when principal repayments begin and what the revised payment will be.