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See your monthly repayments, total interest paid, LMI estimate, and how much you save by paying fortnightly or making extra repayments.
$150,000
Monthly repayment
$3,792
$600,000 loan · 6.5% · 30yr P&I
Fortnightly repayment trick
Pay $1,896/fortnight → save $174,513 in interest
Paying half your monthly repayment fortnightly means 26 half-payments a year — the equivalent of one extra monthly payment. You'd pay off 5yr 10mo sooner.
Estimates only. Principal & interest loan. LMI estimate is indicative — actual premiums vary by lender. Not financial advice.
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See my full plan →How Australian mortgage repayments work
Australian home loans are typically structured as principal-and-interest (P&I) loans over 25–30 years. Your repayment is fixed based on the original loan amount, interest rate, and term — but as your balance falls, more of each payment goes toward principal and less toward interest. This is called amortisation.
The total interest on a long loan is often shocking: a $600,000 loan at 6.5% over 30 years costs over $760,000 in interest alone — more than the original loan. Small changes to your repayment strategy can reduce this significantly.
The fortnightly trick works because there are 26 fortnights in a year — paying half your monthly repayment fortnightly means you make 13 months of payments in a 12-month year. On the same $600,000 loan, this saves roughly $70,000 in interest and pays the loan off 4–5 years early without feeling like a stretch.
Frequently asked questions
How is my mortgage repayment calculated?
Your monthly repayment is based on the loan amount, interest rate, and loan term using the standard principal-and-interest (P&I) formula. At the start, most of your repayment covers interest. Over time, more goes toward principal as the balance reduces.
Does paying fortnightly really save money?
Yes — if you pay half your monthly repayment every fortnight rather than the full amount monthly. There are 26 fortnights in a year, which equals 13 monthly repayments instead of 12. That one extra payment per year reduces your principal faster, saving thousands in interest and cutting years off your loan.
What is LMI and when do I have to pay it?
Lenders Mortgage Insurance (LMI) is a one-off premium charged by the lender when your deposit is less than 20% of the property value (LVR above 80%). It protects the lender — not you — if you default. LMI can cost $10,000–$30,000 and is usually added to your loan balance. Saving a 20% deposit avoids it entirely.
What does LVR mean?
Loan-to-Value Ratio (LVR) is your loan amount divided by the property's value, expressed as a percentage. A $600,000 loan on a $750,000 property is an 80% LVR. Most lenders require LMI once your LVR exceeds 80%. A lower LVR generally means a lower interest rate and better borrowing terms.
How much do extra repayments save?
Extra repayments reduce your principal directly, which means less interest accrues each month. Even $200/month extra on a $600,000 loan at 6.5% saves roughly $60,000 in interest and cuts 4–5 years off a 30-year loan. The earlier in the loan you start, the larger the saving.
Should I choose a 25-year or 30-year loan?
A shorter loan term means higher monthly repayments but significantly less total interest. A 25-year term typically saves $80,000–$120,000 in interest compared to 30 years on a $600,000 loan. If you can comfortably afford the higher repayment, a shorter term is almost always better. A longer term gives you flexibility if income is uncertain.