🏡 Australia Mortgage Calculator

Principal and Interest (P&I) Mortgages are the most common type where monthly payments cover both interest and principal, gradually paying down debt. Banks prefer P&I as they reduce risk. A $600,000 mortgage at 6.5% over 30 years costs $3,790 monthly, totaling $764,400 interest. Builds equity consistently and ensures home ownership at term end. Interest-Only Mortgages: Payments cover only interest for initial period (typically 1-10 years), keeping payments lower but principal unchanged. After interest-only period ends, loan reverts to P&I with higher payments. Popular with investors claiming tax deductions, but risky for owner-occupiers who defer equity building. Same $600,000 loan costs $3,250 monthly interest-only, but principal remains $600,000 requiring larger future payments. Fixed vs Variable Rates: Variable rates fluctuate with RBA cash rate and lender decisions, currently 6.0-7.0% for owner-occupiers. Fixed rates lock in rates for 1-5 years, currently 5.8-6.8%, providing certainty but limiting flexibility. Split loans combine fixed and variable portions, balancing security and flexibility. Breaking fixed loans incurs substantial break costs, often $10,000-30,000 on large mortgages.

LVR represents loan amount as percentage of property value. Australian lenders offer maximum 95% LVR ($570,000 loan on $600,000 property = 5% deposit) but require Lenders Mortgage Insurance (LMI) above 80% LVR. LMI protects lender if borrower defaults - costs $9,000-30,000 on typical purchases, added to loan or paid upfront. LMI represents significant cost: $700,000 purchase with 10% deposit ($70,000) incurs $15,000-20,000 LMI; 20% deposit ($140,000) avoids LMI entirely. Optimal strategy involves saving 20% deposit to avoid LMI, though this delays purchase. For $800,000 property: 5% deposit ($40,000) + LMI ($25,000) + stamp duty ($32,000) = $97,000 total costs. 20% deposit ($160,000) + stamp duty ($32,000) = $192,000 - $95,000 more but saves $25,000 LMI and reduces loan size/interest. First home buyers weigh immediate entry (low deposit + LMI) against delayed entry with larger deposit (no LMI, lower ongoing costs).

First Home Guarantee (FHG): Federal scheme allows eligible first home buyers to purchase with 5% deposit without paying LMI (government guarantees additional 15%). Limited to 35,000 places annually, properties under $600,000-$950,000 depending on location, income caps apply ($125,000 singles, $200,000 couples). Significant savings - avoid $15,000-25,000 LMI on typical purchases. First Home Owner Grant (FHOG): State/territory grants up to $10,000-15,000 for purchasing new homes or building. NSW offers $10,000 for new homes under $600,000; Victoria $10,000 for new homes under $750,000; Queensland $15,000 for new homes statewide. Requirements and amounts vary by state. Grants reduce effective deposit needed for entry. Stamp Duty Concessions: Most states offer stamp duty exemptions or reductions for first home buyers under property price thresholds. NSW fully exempts stamp duty on properties under $650,000 (savings up to $24,000), partial concessions to $800,000. Victoria fully exempts to $600,000, partial to $750,000. Stamp duty represents 3-5% of purchase price - concessions save $15,000-40,000 on typical first homes.

Sydney: Australia's most expensive market. Median house price $1,100,000-1,200,000, units $750,000-850,000. North Shore, Eastern Suburbs, Inner West command premiums ($1,500,000-3,000,000+). Western Sydney more affordable ($750,000-900,000). Average mortgage sizes $700,000-900,000. Melbourne: Second most expensive. Median house $850,000-950,000, units $550,000-650,000. Inner suburbs (Fitzroy, Carlton, Richmond) expensive ($1,200,000+). Outer suburbs (Werribee, Cranbourne, Melton) more accessible ($550,000-750,000). Average mortgages $600,000-800,000. Brisbane: Rapidly appreciating market. Median house $750,000-850,000, units $500,000-600,000. Inner city (New Farm, Paddington) premium ($1,000,000+). Growth corridors (Logan, Ipswich) entry-level ($450,000-650,000). 2032 Olympics driving infrastructure investment and price growth. Perth/Adelaide: Most affordable capitals. Perth median $650,000-750,000, Adelaide $700,000-800,000. Mining-dependent Perth experiences boom-bust cycles tied to commodity prices. Adelaide steady growth, lower volatility. Average mortgages $450,000-600,000. Better affordability for middle-income households.

Extra Repayments: Australian mortgages typically allow unlimited extra repayments on variable loans (fixed loans often limit to $10,000-30,000 annually). Extra payments directly reduce principal, saving interest and shortening loan terms. $500,000 mortgage at 6.5% over 30 years: adding $500 monthly extra saves $187,000 interest and finishes 10 years early. Even $100 monthly extra saves $41,000 and finishes 3.5 years early. Offset Accounts: Transaction accounts linked to mortgage where balance offsets loan principal for interest calculations. $600,000 mortgage with $50,000 offset balance charges interest on $550,000 only. Savings remain accessible unlike redraw facilities. Offset accounts save equivalent to mortgage interest rate (6.5%) on deposited funds - far exceeding typical savings account rates (3-4%). Prioritize building offset balances over separate savings. Fortnightly vs Monthly Payments: Paying half monthly amount fortnightly creates 26 payments yearly (equivalent to 13 monthly payments), accelerating repayment. $600,000 mortgage at 6.5%: monthly $3,790 over 30 years; fortnightly $1,895 saves $51,000 interest and finishes 2.5 years early. No extra money paid - simply payment frequency change leverages compounding.

This calculator helps Australian homebuyers understand true borrowing costs before committing. Input property price in AUD, deposit amount, anticipated interest rate (check current rates from major banks), and loan term (typically 25-30 years). Add estimated council rates, property insurance, and LMI if deposit under 20%. Calculator shows monthly payments broken down by component, total interest over loan lifetime, and principal/interest split over time. Experiment with scenarios: how does 10% vs 20% deposit affect monthly costs and LMI? What happens if interest rates increase 1-2%? How much do extra repayments save? Compare P&I vs interest-only structures. Use when evaluating properties, determining maximum affordable borrowing, or planning refinancing. Remember actual rates depend on credit score, employment, deposit size - consult mortgage broker for personalized rates.