Australian Extra Mortgage Repayment Calculator 2026 — Interest Saved & Years Cut
Real-World Examples — 2026
$600,000 loan — $500/month extra
A homeowner with a $600,000 loan at 6.3% with 28 years remaining makes an extra $500 per month on top of the standard repayment of approximately $3,760. The loan is paid off in approximately 21 years instead of 28 — saving 7 years and approximately $130,000 in interest. The total cost of the extra repayments ($500 × 252 months = $126,000) results in savings that exceed the outlay within about 15 years.
$450,000 loan — $1,000/month extra
A buyer with a $450,000 loan at 6.3% and 25 years remaining makes an extra $1,000/month. Standard repayment is approximately $3,000. Adding $1,000 reduces the loan term from 25 to approximately 16 years, saving 9 years and approximately $145,000 in interest. This approach requires $1,000 less disposable income monthly but saves significantly versus investing in a savings account at typical deposit rates.
Frequently Asked Questions
How much can extra repayments save on an Australian mortgage?
The savings depend on the loan balance, rate, and extra amount. On a $600,000 loan at 6.3% with 28 years remaining, paying an extra $500/month saves approximately $130,000 in interest and cuts the loan term by approximately 7 years. Even $200/month saves around $60,000 in interest and reduces the term by about 3.5 years.
Can I make extra repayments on a fixed rate home loan?
Most fixed rate home loans in Australia allow limited extra repayments without penalty — typically $10,000 to $30,000 per year depending on the lender. Exceeding this limit usually incurs break fees. Variable rate loans generally allow unlimited extra repayments at no cost. Check your loan contract or ask your lender before making large additional payments.
Is it better to make extra repayments or use an offset account?
Both approaches reduce the interest you pay by the same amount if the offset balance equals the extra repayments made. The key difference is liquidity: money in a redraw facility (accessed via extra repayments) can be harder to access and may have tax implications for investors, whereas offset account funds remain easily accessible. For owner-occupiers there is usually no meaningful difference. For property investors, an offset account is generally preferable for tax flexibility.
Does making extra repayments reduce my minimum monthly repayment?
Usually not automatically. Making extra repayments reduces your loan balance and therefore the interest component of future repayments — but lenders typically do not automatically lower your minimum repayment. The benefit is that your loan is paid off sooner. Some lenders allow you to request a lower minimum repayment after significant overpayments; contact your lender to check.
What is the fastest way to pay off a mortgage in Australia?
The most effective strategies are: switching to fortnightly repayments (makes 26 half-payments = 13 full payments per year), making lump-sum repayments when you receive bonuses or tax refunds, using an offset account to park all savings, and rounding up your repayment amount to the nearest hundred. Combining all these strategies can reduce a 30-year loan by 8–10 years.