Calculator
Mortgage Calculator (Australia)
Mortgage Calculator (Australia)
Offsets only work against the variable portion.
Scheduled Monthly Repayment
$3,713.84
Repayment Analysis
A straight 30-year loan of $600,000 at 6.3% costs $3,713.84 per Month and about $736,981.23 in lifetime interest. Your 80% LVR sits at or below the 80% line, avoiding LMI. Add an offset balance or extra repayments to see how much of that interest you can erase.
*Repayments are modelled on a standard amortising Australian principal-and-interest loan with the split, offset and extra-repayment settings you choose. Actual repayments vary with lender daily-compounding conventions, fees and rate movements. Educational only, not credit advice.
How Australian Home Loans Really Work
An Australian mortgage is more than a rate and a term — it is a structure you assemble. Most borrowers start with a principal-and-interest loan over 25 or 30 years, but the decisions that actually move lifetime cost are the ones layered on top. Split loans let you fix part of the balance (often 40-60%) for one to five years while the rest floats variable, blending rate certainty with flexibility. Offset accounts hold your savings against the variable portion, so interest is charged only on the balance net of your cash — effectively a tax-free return equal to your loan rate. And repayment frequency matters more than most people think: switching monthly repayments to fortnightly quietly adds a thirteenth monthly payment each year, slicing years off a 30-year term. Australian lending has its own conventions too. Rates are quoted annually but charged on daily balances, variable rates move with the RBA cash rate and funding conditions, and fixed rates revert to a (usually higher) revert rate when the fixed period ends. Offsets only work on variable portions — a fixed split cannot be offset — and extra repayments are typically unlimited on variable loans but capped on fixed ones. Cross 80% LVR and Lenders Mortgage Insurance enters the picture; sit below it and you keep the sharpest pricing. This calculator assembles the whole structure: loan size and property value (for LVR), a variable rate, an optional fixed split with its own rate and period, weekly or fortnightly or monthly repayment frequency, an offset balance, and extra repayments. It shows the scheduled repayment, the lifetime interest under your structure versus a plain baseline, and how much the offset and extras are genuinely saving you.
Amortisation With an Australian Structure
The scheduled repayment is the standard amortising formula: principal multiplied by the periodic rate, divided by one minus one-plus-rate to the negative number of periods. For a split loan the opening blend is the balance-weighted average of the fixed and variable rates — a 60% fixed portion at 5.8% and 40% variable at 6.3% blends to about 6.0% — and the scheduled repayment is set once on that blend over the full term, the way lenders set it at settlement. The simulation then walks the loan period by period at your chosen frequency. Each period the fixed portion accrues at the fixed rate while the fixed period lasts, then reverts to the variable rate; the variable portion always accrues at the variable rate, charged on the balance net of your offset balance (offsets cannot attach to fixed portions, so the fixed side gets no offset benefit). The scheduled repayment is split across the two portions, and any extra repayments attack the variable balance first — mirroring how most Australian lenders apply them and preserving the option to redraw. The baseline scenario reruns the same loan with no offset and no extras, so the interest saved figure isolates exactly what your offset and extra-repayment strategy is worth in dollars. Fortnightly and weekly frequencies use 26 and 52 periods per year respectively, which is why they outperform '12 monthly payments divided by 26' — you genuinely make the equivalent of 13 monthly payments a year without feeling it.
Expert Insights
The Split Loan Is a Hedge, Not a Bet
Splitting 50-60% fixed is not a prediction that rates will rise — it is insurance that your core repayments survive whatever the RBA does, while the variable portion lets you keep an offset, make unlimited extras, and benefit if rates fall. Borrowers who fixed 100% at the 2021 lows won, but borrowers who fixed 100% before the 2022-23 rises got trapped by break costs and no offset. The split exists because nobody reliably knows which year is which.
Fortnightly Is the Free Lunch
Paying half your monthly repayment every fortnight means 26 half-payments — 13 full payments a year — without any change to your budget rhythm. On a $600,000, 30-year loan at 6.3% that single switch saves roughly six figures of interest and about five years of term. It works because you never give the interest a full month to accrue on the full balance, and lenders credit the extra principal immediately.
Every Offset Dollar Earns the Loan Rate, Tax-Free
A dollar in your offset 'earns' your variable rate — 6.3% here — with no tax, because you are avoiding interest rather than earning it. For a 37% taxpayer that matches a term deposit paying about 10% pre-tax, at zero risk. Keep salaries and savings sweeping through the offset rather than a savings account, and remember the benefit only exists on the variable portion — another reason to keep a variable split even when fixed rates look attractive.
Actionable Tips
- 1
Check the LVR Line Before You Sign
Enter your property value honestly and watch the LVR readout. Below 80% you avoid LMI and get sharper rates; above it, get quotes for the LMI premium (it can run to five figures and is usually capitalised into the loan) or test whether the First Home Guarantee covers you. Sometimes waiting six months to save another 2% of deposit beats paying the insurance.
- 2
Model the Revert Rate, Not Just the Fixed Rate
When you set a fixed split, assume the fixed portion reverts to the variable rate when the period ends — this calculator does exactly that. If the revert-year repayment shocks you, shorten the fixed period or shrink the fixed share. Lenders count on borrowers not re-fixing at expiry, so diary the expiry date three months out and negotiate or re-fix before the revert rate bites.
- 3
Aim Extras at the Variable Portion and Keep Them Redrawable
Extra repayments on the variable portion cut interest immediately and stay accessible through redraw if the roof fails. Fixed portions usually cap extra repayments at $10,000-$30,000 a year and charge break costs on early payout — so structure the split so your surplus cash flow always has somewhere variable to land.
Real-World Examples
Ellen's Split Survived the Rate Cycle
Ellen borrowed $700,000 in 2021 and split it 50/50, fixing her half at 2.9% for three years. When the cash rate surged through 2022-23 her variable half's repayment jumped, but the fixed half held — the calculator's blended-repayment view had shown her exactly that buffer before she signed. At expiry she re-fixed for two years at a rate she'd already budgeted for, never once missing the repayment plan.
The Nguyens Found Five Years in the Fortnight
On their $540,000 loan, switching from monthly to fortnightly repayments felt like nothing — the same money, slightly different rhythm. The simulation showed it saving about $98,000 in interest and clearing the debt five years early. They redirected the saved years into an investment-property deposit plan instead, using the equity that the early payoff created.
Sam's Offset Beat His Savings Account
Sam kept $35,000 in a 4.75% bonus saver 'for emergencies' while paying 6.3% on his variable loan. Moving it into the offset lifted his effective return by 1.55 points, tax-free — worth about $540 a year more, every year. When the hot-water system died, he still had every dollar available instantly, and his loan balance (and redraw) had never moved.
Glossary of Terms
- Split Loan
- One home loan divided into a fixed-rate portion and a variable-rate portion, blending repayment certainty with offset and extra-repayment flexibility.
- Offset Account
- A transaction account whose balance is subtracted from the linked variable loan balance before interest is calculated, saving interest at the loan rate tax-free.
- LVR (Loan-to-Value Ratio)
- Loan amount divided by property value; above 80% most Australian loans attract Lenders Mortgage Insurance and tighter pricing.
- Revert Rate
- The variable rate a fixed portion rolls onto when the fixed period ends — usually the lender's standard variable rate, so re-fix or negotiate beforehand.
Frequently Asked Questions
Everything you need to know about this topic.
Ivy Sinclair-Wren
Financial Chaos Analyst
Ivy Sinclair-Wren is a Financial Chaos Analyst covering investing, AI, wealth psychology, and the emotional consequences of opening finance apps during market crashes. Based in Melbourne, she specializes in demystifying the Australian tax code and helping users navigate the intersection of spreadsheet logic and human irrationality.