Mortgage Amortization Calculator
See your full amortization schedule and how extra payments reduce your loan term and total interest. Interactive sliders update results in real time.
Mortgage Amortization Calculator
See how extra repayments reduce your loan term and total interest paid.
See exactly where your mortgage payments go
When you take out a 30-year home loan, most of your early payments go toward interest rather than paying down the principal. On a $600,000 mortgage at 6.5%, the first month's payment of $3,796 allocates $3,250 to interest and only $546 to principal β a split that most borrowers never see laid out clearly. This calculator breaks down that split month by month, shows you the full amortization schedule, and lets you model how extra repayments change the trajectory of your loan.
Adjust the loan amount, interest rate, term, and extra monthly payment using the sliders. The three result cards update instantly: your monthly payment, how much interest you save by making extra repayments, and how many years you cut from the loan term. A balance-over-time chart plots two lines β your baseline loan trajectory and the accelerated one β so you can see the crossover where extra payments pull ahead. Toggle the amortization table to inspect every single payment down to the dollar.
Who uses this calculator
A couple looking at a $550,000 loan can instantly see that a 25-year term costs $873/month more than a 30-year term but saves $142,000 in total interest. That concrete dollar figure helps them decide whether the higher monthly commitment is worth it before they apply with a lender.
If you receive a $12,000 annual bonus, you can model the impact of putting $1,000/month extra toward the mortgage versus making a single $12,000 lump-sum payment once a year. The amortization table shows exactly how each approach shifts the interest-to-principal ratio month by month.
A broker comparing a 5.9% variable rate against a 6.3% fixed rate can pull up this tool during a meeting and show the client the real monthly and total-interest difference on their specific loan amount β no spreadsheets required.
Someone currently paying 7.2% who has been offered 6.1% by a new lender can enter both scenarios and see the monthly savings, total interest reduction, and how long it takes for the refinancing costs to pay for themselves.
How the amortization schedule is calculated
Every mortgage payment covers two things: interest on the outstanding balance and repayment of the principal. The split between these two shifts every month β early payments are mostly interest, later payments are mostly principal. This tool computes that split using the standard annuity formula that lenders worldwide use to structure principal-and-interest loans.
All calculations run locally in your browser. No financial data you enter is transmitted anywhere.
The fixed-payment formula
n = Total months = Years Γ 12
Payment M = P Γ [r(1+r)βΏ] / [(1+r)βΏ β 1]
Each month: Interest = Balance Γ r
Principal = M β Interest + Extra
Balance = Balance β Principal
The monthly payment M is calculated once at the start and stays fixed for the life of the loan. On a $600,000 loan at 6.5% over 30 years, that works out to $3,796 per month. In month one, interest is $600,000 Γ 0.065 Γ· 12 = $3,250, leaving only $546 to reduce the principal. By month 120 (year 10), the balance has dropped enough that roughly $1,200 of each payment goes to principal. By month 300 (year 25), the split has flipped β about $2,800 goes to principal and $1,000 to interest. This gradual shift is why a 30-year loan costs so much more total interest than a 15-year loan, even though the monthly payment is lower.
How extra payments shorten the loan
When you add an extra amount each month, the entire extra payment goes directly to reducing the principal. Because interest for the next month is calculated on the now-smaller balance, you pay less interest the following month β and every month after that. The effect compounds: an extra $500/month on a $600,000 loan at 6% saves approximately $152,000 in total interest and pays off the loan about 8 years early. The chart on this page shows this visually β the green "with extra" line diverges from the blue baseline, and the dashed vertical line marks the point where the accelerated loan is fully paid off.
The amortization table lets you verify this month by month. Each row shows the payment, the interest portion, the principal portion, and the remaining balance. You can watch the interest column shrink and the principal column grow as you scroll through the schedule.
Daily vs. monthly interest calculation
Most Australian lenders calculate interest daily on the outstanding balance rather than monthly. A daily-method lender charges interest on day 1 based on the full balance, applies your payment, then charges interest on day 2 based on the reduced balance, and so on for 365 days. This tool uses standard monthly compounding β one calculation per month β which produces results within approximately 0.5% of the daily method. The difference on a $600,000 loan over 30 years is typically a few hundred dollars in total interest, which is negligible for planning purposes but worth knowing about if you're comparing these figures to your lender's official statements.
Edge cases the tool handles
A 0% interest rate produces linear amortization β the monthly payment is simply the loan amount divided by the number of months, with no interest component. Very short terms (10 years) are fully supported. When extra payments are large enough to retire the loan before the end of the term, the final payment is automatically adjusted to zero out the remaining balance exactly, avoiding rounding artefacts that could leave a residual cent.
Frequently Asked Questions
How much does an extra $500/month save on a $600k mortgage?
On a $600,000 mortgage at 6% over 30 years, an extra $500 per month reduces the loan term by approximately 8 years and saves roughly $152,000 in total interest. The savings compound because each extra dollar reduces the principal immediately, meaning every subsequent month calculates interest on a smaller balance. Over 30 years, that $500/month extra β totalling $180,000 in additional contributions β avoids $152,000 in interest charges, effectively earning a risk-free 84% return on the extra money deployed. Use the extra payment slider to see the precise figure for your exact rate, term, and repayment amount.
Does this calculator account for offset accounts?
No β this tool models a standard principal-and-interest loan without an offset facility. An offset account works by reducing the balance that interest is calculated on each day. To approximate the effect, subtract your typical offset balance from the loan amount before entering it into the calculator. For example, if you have a $600,000 loan and $50,000 in an offset account, enter $550,000 as the loan amount. The approximation is close but not exact because most lenders calculate offset interest daily while this tool uses monthly compounding.
What is the difference between P&I and interest-only loans?
This calculator models a principal-and-interest (P&I) loan where each payment reduces the outstanding balance. Interest-only loans charge only the interest for an initial period β typically 1 to 5 years β after which they revert to P&I with significantly higher payments to cover the original principal within the remaining term. On a $600,000 loan at 6%, interest-only for 5 years means you pay $30,000/year in interest for 5 years without reducing the principal at all, then face P&I payments on the full $600,000 for the remaining 25 years. That structure adds roughly $90,000 in total interest compared to P&I from day one.
Why does the schedule show slightly different numbers to my bank?
Most Australian lenders calculate interest daily on the outstanding balance rather than monthly. A daily-method lender applies your payment on the day it's received, then recalculates interest on the new balance for the next day. This tool uses monthly compounding β one interest calculation per month β which produces results within approximately 0.5% of the daily method. On a $600,000 loan over 30 years, the difference is typically $200β$500 in total interest. Some lenders also include monthly account-keeping fees ($8β$15/month) in their statements, which this tool does not capture. For exact figures, always refer to your lender's official loan contract and periodic statements.
Can I use this calculator for an investment property loan?
Yes β the amortization mathematics are identical for owner-occupied and investment property loans. The key difference is that investment loans often carry a 0.2β0.5% higher interest rate, and you may be able to claim tax deductions on the interest portion. This tool does not model tax deductions or negative gearing. Enter your investment loan's actual rate and term to see the repayment schedule, then consult a qualified accountant for the tax implications specific to your situation.
What happens if I make extra payments irregularly rather than monthly?
This calculator assumes a consistent extra payment each month. In practice, irregular extra payments β such as a $12,000 annual bonus deposited once a year β still reduce total interest, but the savings are slightly less than spreading the same $1,000/month across 12 months. The reason is timing: the $1,000 paid in January starts saving interest for 12 months, while the $12,000 deposited the following January only saves interest for 11 months. For irregular scenarios, divide your annual extra amount by 12 and enter that as the monthly figure to get a realistic estimate.
How does this compare to my bank's mortgage calculator?
Bank calculators typically show you the minimum monthly repayment and little else. This tool goes further: it displays the full amortization schedule month by month, shows the interest-versus-principal split for every payment, plots a balance-over-time chart, and lets you model extra repayments to see the exact interest savings and term reduction. Bank calculators also often exclude fees, charges, and LMI (lenders mortgage insurance), while this tool focuses purely on the loan principal and interest β giving you a cleaner picture of the core loan mechanics.
Should I use the offset account or make extra repayments?
Both strategies reduce interest, but they work differently. Extra repayments permanently reduce your loan balance, which means you can't redraw the money without a formal loan increase. An offset account keeps your money liquid β you can withdraw it at any time β while still reducing the interest charged each day. The trade-off is that offset accounts often come with higher loan fees ($10β$25/month) and slightly higher interest rates. If you have disciplined savings habits and want to minimise total interest, extra repayments usually win. If you need emergency fund access, an offset account provides flexibility that extra repayments don't.