Australian Home Loan Calculator

Australian home loans have their own conventions that differ from both the US and the UK, and they shape every figure a lender or broker quotes: a market built around variable rates, flexible features like offset accounts, mortgage insurance below a 20% deposit, and a regulated comparison rate. Knowing these before you apply makes the numbers make sense.

Variable, fixed and split

Most Australians borrow on a variable rate, which moves with the lender's pricing and the Reserve Bank's cash rate, so the repayment can go up or down. You can fix the rate for one to five years for certainty, or split the loan part-fixed and part-variable to hedge. Variable loans usually come with the flexible features below, which fixed loans often limit. See fixed vs variable rates.

Offset accounts and redraw

Two features make Australian loans especially flexible. An offset account is an everyday transaction account linked to your loan; its balance is subtracted from the loan balance before interest is calculated, so keeping savings there directly reduces the interest you pay. A redraw facility lets you pull back extra repayments you have already made. Both cut interest while keeping your money accessible — this calculator shows the base repayment, before the benefit of an offset.

Deposit, LVR and LMI

Your loan-to-value ratio (LVR) is the loan as a percentage of the property value. With a deposit under 20% (LVR above 80%), lenders usually charge Lenders Mortgage Insurance (LMI) — a one-off premium that protects the lender, not you, and is often capitalised onto the loan. A 20% deposit avoids it, and some buyers use a guarantor or a government scheme to reduce or avoid it. LMI can run into the thousands, so it is worth factoring into your deposit plan.

The comparison rate and serviceability

Australian lenders must publish a comparison rate beside the advertised rate; it folds most standard fees into a single figure so you can compare loans more honestly. Lenders also assess serviceability — whether you can afford repayments — and, under APRA guidance, test you at a buffer above the actual rate to make sure you could cope if rates rose. The affordability calculator gives a sensible starting estimate of what you might borrow.

Principal-and-interest vs interest-only

Owner-occupiers almost always take a principal-and-interest loan, where each repayment reduces the balance until it reaches zero — that is what this calculator models. Interest-only loans, where you pay only interest for a set period, are more common with investors for tax and cash-flow reasons, but they cost more over the life of the loan because the balance does not fall during the interest-only period.

Stamp duty and the costs of buying

The largest upfront cost beyond the deposit is usually stamp duty (transfer duty), set by each state and territory and often tens of thousands of dollars — though first home buyers frequently qualify for concessions, exemptions or grants. Budget also for conveyancing, building and pest inspections, and loan fees. Ongoing, council rates and building insurance are paid separately from the loan, so your true monthly housing cost is the repayment above plus those bills.