Australian home loans are front-loaded with interest. In the early years of a 30-year mortgage, the vast majority of each payment goes to interest rather than principal. Every dollar of extra repayment attacks that principal directly — reducing the base on which future interest is calculated.
The compounding effect is powerful. On a $600,000 loan at 6.18% over 30 years, an extra $500 per month saves approximately $148,000 in interest and shortens the term by around 8 years. The earlier you start, the greater the saving — because you remove interest-bearing principal at the most expensive part of the schedule.
Frequency matters less than consistency. Whether you pay $500 monthly, $250 fortnightly, or $115 weekly, the total annual extra is what drives the saving. More frequent payments do reduce the outstanding balance slightly faster between cycles, but the difference over a full term is small compared to simply making the extra payment at all.
How this calculator works
The calculator runs two month-by-month amortisation simulations — one with your standard repayment only, one adding your extra amount converted to a monthly equivalent. It records the loan balance at the end of each year and counts the month the extra-repayment schedule reaches zero, giving you months saved and total interest saved.
The start month field lets you model a delay — for example, extras beginning after a fixed-rate period ends or once a renovation is complete.
Extra repayments on fixed vs variable loans
Most Australian fixed-rate mortgages cap extra repayments at $10,000–$20,000 per year before a break cost applies. Variable-rate loans generally allow unlimited extra repayments without penalty. If you are on a fixed rate, check your product disclosure statement before making large lump-sum payments.