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Extra Repayments Calculator
See how paying a little extra each month can save you years off your loan and tens of thousands in interest. Adjust your loan details and extra amount below.
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The power of extra repayments
Every extra dollar you pay into your home loan reduces the principal that interest is calculated on - and the effect compounds over the life of the loan. On a $500,000 loan at 6.29%, paying an extra $200 per month saves over $70,000 in interest and cuts roughly 4 years off a 30-year term. The earlier in your loan you start making extra repayments, the greater the compounding impact.
Not all loans treat extra repayments equally. Variable rate loans generally allow unlimited extra repayments with no fees. Fixed rate loans typically cap them at $10,000 to $30,000 per year - exceed that limit and you may trigger a break cost. Some lenders also restrict redraw access on extra repayments, so understanding your loan structure matters before you commit additional funds. This is something a broker should walk you through before you make decisions.
If you are weighing up extra repayments versus parking money in an offset account, the interest saving is mathematically identical - but offset funds stay accessible. For most borrowers with variable loans, an offset account gives the same benefit with more flexibility. Book a chat and we will help you find the right structure for your situation.
Frequently asked questions
Can I make extra repayments on any home loan?
Most variable rate home loans allow unlimited extra repayments without penalty. Fixed rate loans typically cap extra repayments at $10,000 to $30,000 per year - exceeding this triggers a break cost. If you are on a fixed rate and want to pay extra, check the cap with your lender first. Lendology reviews your specific loan conditions before recommending any repayment strategy.
How much difference does a small extra payment actually make?
More than most people expect. On a $500,000 loan at 6% over 30 years, an extra $100 per month saves approximately $40,000 in interest and cuts nearly 2.5 years from the term. An extra $500 per month saves around $87,000 and cuts 5.5 years. The compounding effect means even small consistent amounts make a surprising difference over time - especially in the early years of a loan.
Is it better to make extra repayments or use a redraw or offset account?
The interest saving is mathematically identical whether you pay extra directly into the loan or hold the same amount in an offset account. The key difference is access - offset funds can be withdrawn easily, while extra repayments reduce the loan balance permanently (though many loans offer redraw). If you might need the money, use an offset. If you want to commit to the saving, pay extra directly into the loan.
What happens if I make a one-off lump sum repayment?
A lump sum payment immediately reduces your outstanding loan balance, which reduces the daily interest calculated from that point forward. On most variable loans this shortens your remaining term while keeping your repayment the same. Use the calculator above to model the exact impact - enter the lump sum amount in the "Extra payments" step and set the regular extra to $0 if you only want to see the lump sum effect.
Does paying fortnightly instead of monthly make a big difference?
Yes. Because there are 26 fortnights in a year (not 24), paying half your monthly repayment fortnightly means you make the equivalent of 13 monthly payments per year - one extra payment annually. On a $500,000 loan at 6%, this alone cuts approximately 3.5 to 4 years off a 30-year term and saves around $50,000 in interest, without paying any extra per period. It is one of the simplest and most effective strategies available to borrowers.