Extra Loan Repayments Calculator
How to use this calculator
Firstly work out how much you are able to set aside for your home loan repayments. The easiest way to do this is to add the rent that you are currently paying to the amount that you are currently saving to the amount that you could realistically cut from your spending. This is a reasonable figure for how much you can afford to repay.
If you want to maximise your savings then try talking to your employer to see if your home loan repayments can be made directly from your salary. This means that you don’t have to budget as you never see the money in your cheque account, the extra payments go directly into your mortgage.
Try entering different figures into the calculator to see how much you can save and how much you can afford.
Why does making extra repayments save so much?
When you first setup your home loan, around 90% of the repayments are going towards the interest. Very little is actually reducing the balance on your loan. If you make additional repayments then these are going directly off of the balance, and will rapidly reduce the amount that you owe.
As the amount that you owe drops, the amount of interest that you are charged will reduce as well. As a result, the savings begin to compound and your loan will be paid off much faster than if you just made the minimum payments over 30 years.
Find more loan calculators
You can find more calculators on our loan calculators page.
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