What is a mortgage calculator?
If you're thinking about buying a home or refinancing, one of the first things most people do is punch some numbers into a mortgage calculator. It's a great starting point — but there's more to it than most people realise.
Here's a guide to how mortgage calculators work, the different types available, and what to do once you've got your numbers.
The Basics
A mortgage calculator is a financial tool that helps you estimate your home loan repayments based on three key inputs — your loan amount, your interest rate, and your loan term.
Change any one of those three variables and your repayment changes. Borrow more, pay more. Have a higher interest rate, pay more. Extend your loan term, pay less each month but more overall because you're paying interest for longer.
It sounds simple, and at a basic level it is. But understanding what the numbers mean — and what they don't tell you — is where things get more useful.
The Different Types of Mortgage Calculators
Not all calculators are built the same. Lenders and financial institutions provide different types to suit different needs, and knowing which one to use for your situation makes a big difference.
Repayment calculator. This is the most common type. You enter your loan amount, interest rate and loan term, and it tells you what your monthly or fortnightly repayments would be. It's a useful starting point for understanding what a loan of a certain size would cost you each month.
Borrowing capacity calculator. Rather than starting with a loan amount, this one works backwards. You enter your income, your expenses and your existing debts, and it estimates how much a lender might be willing to lend you. It's a helpful way to get a rough sense of your budget before you start looking at properties.
Stamp duty calculator. Stamp duty is one of the biggest upfront costs when buying property and it varies significantly depending on your purchase price, your state, and whether you qualify for any first home buyer exemptions. A stamp duty calculator gives you an estimate of what you'll owe — or what you might save if you're eligible for a concession.
Offset calculator. This one shows you how much money you can save in interest by keeping funds in an offset account linked to your loan. As we've written about before, interest is calculated daily — so keeping money in your offset account can make a significant difference over the life of your loan. This calculator helps you visualise exactly how much.
Extra repayments calculator. One of the most motivating calculators available. You enter your loan details and then add an extra repayment amount — say an extra $200 or $500 per month — and it shows you how much interest you'd save and how many years you'd cut off your loan. The numbers can be genuinely surprising.
Refinance calculator. If you're thinking about refinancing your existing loan to a lower rate, this calculator helps you compare your current repayments against what you'd pay on a new loan, and estimates your potential savings over time
You can access all of our calculators on our website here.
How to Use a Mortgage Calculator Effectively
Getting the most out of a mortgage calculator comes down to putting in realistic numbers.
A few tips:
Use a realistic interest rate. It can be tempting to plug in the lowest advertised rate you've seen, but that rate may not be the one you'll actually get. Use a rate that's close to what lenders are currently offering for your situation — your actual rate will depend on your deposit size, your credit history, and the type of loan you're applying for.
Factor in all your costs. Your monthly repayment is just one part of your financial commitment. You'll also need to account for council rates, strata fees if you're buying a unit, home and contents insurance, and general maintenance. A repayment calculator only shows you the loan cost — make sure you're thinking about the full picture.
Try different scenarios. The real value of a calculator is in experimenting. What happens if rates rise by 1%? What if you borrow $50,000 less? What if you make fortnightly repayments instead of monthly? Playing around with these variables gives you a much better sense of your position and your flexibility.
Use the extra repayments calculator before you decide on a loan term. A lot of people default to a 30 year loan term without realising how much a small extra repayment can change the outcome. Run the numbers — you might find that paying an extra $300 a month cuts five years off your loan and saves you tens of thousands in interest.
What a Mortgage Calculator Doesn't Tell You
This is the important part.
A mortgage calculator gives you an estimate — not an approval. The number it produces is based only on what you've entered, and it doesn't account for the full picture of how lenders actually assess applications.
Here's what calculators don't factor in:
Your actual borrowing capacity. Lenders assess your application based on your income, your living expenses, your existing debts, your employment type, and a serviceability buffer of 3% above your actual rate. A calculator doesn't know any of this — it just does the maths on what you've entered.
Lenders Mortgage Insurance. If you're borrowing more than 80% of the property value, you may need to pay LMI. This can be a significant cost and won't show up in a basic repayment calculator.
Your credit history. Your credit file affects which lenders will approve you and at what rate. A calculator assumes you'll get the rate you've entered — your actual rate may be different.
Different lender policies. Every lender assesses applications differently. Some are more generous with certain income types. Some exclude HECS debt if it's close to being repaid. Some offer 35 year loan terms that reduce your minimum repayment. A calculator can't show you these differences — but we can.
Try Our Calculators
We've put together a range of calculators to help you run the numbers on your situation. Whether you want to estimate your repayments, work out how much extra repayments could save you, or calculate your stamp duty, you can find them all here.
Access our mortgage calculators here.
And when you're ready to talk through what the numbers mean for your situation, we're here.
Not sure where your budget fits or what you can borrow? We can run through your borrowing capacity, compare lenders, and give you a clear picture of what's actually possible.
Get in touch today and let's find out what you can do.
