Frequently Asked Questions
How do I calculate monthly mortgage repayments? ▾
Enter the loan amount, annual interest rate, and loan term. The calculator uses the standard amortisation formula to show your exact monthly repayment, the total interest you'll pay, and the total amount repaid over the loan term.
What is compound interest? ▾
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It's the reason investments grow exponentially — your returns generate further returns. Einstein reportedly called it the eighth wonder of the world.
How much does an extra $100/month save on a mortgage? ▾
It depends on the loan size and interest rate, but extra repayments reduce your principal faster, lowering the interest charged on that principal. On a $500,000 mortgage at 6.5%, an extra $200/month can save over $80,000 in interest and cut 4+ years off the loan.
What's the difference between simple and compound interest? ▾
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus any previously earned interest. Most loans and investments use compound interest.
What does interest-only mean for a mortgage? ▾
Interest-only means your repayments only cover the interest — none of the principal. Your loan balance stays the same. Common for investment properties in Australia. At the end of the interest-only period, repayments jump significantly as you start repaying principal.
How is investment return (compound interest) calculated? ▾
The formula is: A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding periods per year, and t is years. With monthly contributions, each contribution also compounds. Our calculator handles all of this automatically.