Australian home loans use a standard amortisation formula: each repayment covers the interest accrued that period, with anything left over paid against the principal. Early on, almost all of the payment is interest. Late in the loan, almost all of it is principal.
Two levers do most of the work: the rate, which the RBA's cash rate steers, and the term, which most lenders cap at 30 years. A 1% rate change on a $650,000 loan over 30 years swings the monthly repayment by about $410.
Repayment frequency matters too. Switching from monthly to fortnightly while keeping the same amount works out to 13 monthly payments a year instead of 12 — quietly shaving years off the term and tens of thousands off the interest.
How to use this calculator
Enter your loan amount, interest rate, and loan term. The calculator pre-fills the current big-four variable average (6.18% as at May 2026), but you should enter your own rate if you have received a quote. Toggle between monthly, fortnightly and weekly to compare repayment schedules. The amortisation chart below shows exactly how much of each payment goes to interest versus principal over the loan life.
What is the average mortgage repayment in Australia in 2026?
The Australian Bureau of Statistics reports the average new owner-occupier loan commitment is around $637,000 nationally (Feb 2026), with Sydney and Melbourne significantly higher. At the big-four variable average of 6.18% over 30 years, a $637,000 mortgage costs approximately $3,888 per month in repayments and a total of roughly $763,000 in interest over the life of the loan.
How much can you borrow on a given salary?
Australian lenders typically apply a debt-to-income (DTI) ratio cap of around 6×. That means a $100,000 salary may support borrowing up to approximately $600,000, though serviceability buffers (lenders must stress-test at rate +3%) and existing debts reduce the practical limit. A $150,000 household income might qualify for up to ~$900,000 subject to deposit size and credit assessment. These figures are indicative — actual borrowing capacity depends on the lender, your credit history, and the property type.
Common mistakes when comparing home loans
The most common error is comparing advertised rates instead of comparison rates — the comparison rate folds in fees, giving a truer cost picture. A loan with a 5.99% rate but large annual fees may cost more than one at 6.10% with no fees. The second mistake is ignoring repayment frequency: many Australians switch to fortnightly repayments and assume they're done, but only “true fortnightly” (half the monthly amount, 26 times per year) accelerates repayment. Some lenders split monthly payments into fortnightly amounts without adding the extra payment — always confirm with your lender.