Australian lenders use the standard amortising loan formula. Each scheduled payment covers the interest accrued on the outstanding balance for that period plus a portion of principal, with the split shifting toward principal as the balance falls. The periodic rate is the annual rate divided by the number of periods in the year (12 monthly, 26 fortnightly, 52 weekly) — and that convention is why fortnightly is not literally monthly divided by two.

Only if the fortnightly amount is set to roughly half the monthly amount, not the lender's true fortnightly schedule. The 'half the monthly' trick effectively makes 13 monthly payments per year instead of 12, accelerating payoff by several years on a 30-year loan. If you simply switch frequency at the same nominal annual cost, total interest barely changes.

Extras applied early in the loan compound powerfully because they reduce the balance that subsequent interest is charged against. Modelling an extra $200 a month on a $650,000 loan at 6% can cut total interest by tens of thousands of dollars and shave 3–5 years off a 30-year term. Use the 'extra' field to model your own scenario.

Principal is the loan balance you still owe. Interest is the lender's charge for letting you borrow it, calculated on the outstanding balance each period. Early in the loan, the bulk of each repayment is interest; by the final years, almost all of it is principal. The amortisation chart on this page shows the shift over time.

This calculator models principal-and-interest (P&I), which is standard for owner-occupiers and most modern investor loans. Interest-only loans defer principal repayment and leave the balance unchanged for the IO period — they cost more in total interest but free up cash flow. APRA has tightened IO lending standards since 2017.

Not directly. An offset balance reduces the interest-bearing portion of the loan and can be modelled here by treating the offset amount as an extra repayment — though offset money remains liquid, which is the key behavioural difference. Redraw works similarly but is less flexible.

Use the rate currently on offer for the product you're considering — not the headline rate, but the rate after any introductory discounts expire. As of 2026, owner-occupier P&I variable rates from major lenders sit in the 5.9–6.4% range; investor and interest-only rates carry a margin of 30–60 basis points on top.