How to use the Extra Repayments Calculator
- 1 Enter the loan amount, rate and term.
- 2 Choose monthly or fortnightly repayments.
- 3 Enter the extra you will pay each time.
- 4 Read the interest saved and time saved.
Worked example
A $600,000 loan at 6% over 30 years with $200 extra each month. The standard repayment is about $3,597. Paying $200 more cuts interest from about $695,029 to $588,336, a saving of about $106,693, and the loan is paid off in about 26 years instead of 30.
Features
Extra repayments
Every extra dollar goes straight to principal.
Fortnightly trick
Half the monthly repayment each fortnight means 13 monthly repayments a year.
Clear comparison
Interest and time saved against standard repayments.
When to use it
Paying off faster
Set a realistic extra amount.
Pay rises
Put part of a raise into the loan.
Rate cuts
Keep repayments the same when rates fall.
Comparing with investing
Weigh the guaranteed saving against other options.
Frequently asked questions
How much do extra repayments save?
Even small amounts make a difference over decades. $200 extra a month on a $600,000 loan at 6% saves over $100,000.
Why does fortnightly help?
There are 26 fortnights a year, so paying half your monthly repayment each fortnight adds one extra monthly repayment a year.
Can I make extra repayments on a fixed loan?
Many fixed loans limit extra repayments, often to $10,000 a year, with break costs above that.
Can I get extra repayments back?
Many variable loans allow redraw of extra repayments.
Offset or extra repayments?
Both save the same interest. An offset is more flexible; extra repayments can be more disciplined.
Should I pay off my loan or invest?
Paying off a loan gives a guaranteed, tax-free return equal to your rate.
Will my repayment go down?
No. The term shortens. Some lenders let you reduce repayments if ahead.
Are there fees?
Variable loans usually have no fees for extra repayments.
What about lump sums?
A lump sum early in the loan saves the most interest.
Does the rate affect savings?
Yes. The higher the rate, the more each extra dollar saves.
Can I make extra repayments any time?
On most variable loans, yes, through internet banking or a direct debit.
Is it better to reduce the term or the repayment?
Reducing the term saves more interest.
What if rates rise?
Being ahead on repayments gives you a buffer when rates go up.
How do I check my progress?
Your loan statement shows the balance and any redraw available.
Should I keep a buffer before making extra repayments?
Yes. Keep an emergency fund, or make sure your loan has redraw, so you can get money back if your income drops or a large bill arrives unexpectedly.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated