Australia Mortgage Payment Calculator

When the deposit is below 20% of the property value, Australian lenders almost always require Lenders Mortgage Insurance. It protects the lender against loss if you default - not you.

• It is triggered by the loan-to-value ratio. At or above 80% LVR it is usually avoided; below that it is normally required, and the premium rises steeply as the deposit shrinks.
• The premium is substantial - commonly around one to three percent of the loan amount, varying with LVR, lender and insurer, and running into many thousands of dollars.
• It can be paid upfront or capitalised into the loan balance. Capitalising means you pay interest on it for the life of the loan.
• It does not protect you. If circumstances force a sale, you remain liable for any shortfall after the lender recovers what it can.

Note. Premiums shown are indicative only. Actual premiums vary by lender, insurer, LVR and personal circumstances - obtain a specific quote. Government schemes such as the First Home Guarantee can allow a smaller deposit without LMI, subject to eligibility and price caps.

• Transfer duty (stamp duty) is payable on purchase and is calculated on the property value by the state or territory where it sits - the rules differ in every jurisdiction.
• First home buyer concessions are common and often generous, but they carry value thresholds that have not always kept pace with house prices. Check the current threshold for your state before assuming eligibility.
• Concessions may be full or partial and some apply only below a set price, with a taper above it.
• Other upfront costs include legal and conveyancing fees, searches, inspection reports, lender application fees, and the moving itself - these commonly total several thousand dollars.
• Government incentives and guarantees exist for eligible first buyers, but most have caps on property price and income.

Note. Do not apply the concession automatically. Confirm the current threshold for your state and territory on the relevant revenue office website before calculating your deposit requirement.

• The comparison rate is mandatory in Australia and is designed to show the true cost including most fees, expressed as an annual rate. A headline rate well below the comparison rate signals substantial upfront fees.
• Compare comparison rates on identical loan amounts and terms - a fee-heavy loan looks very different over 30 years at $600,000 than it does in the advertised example.
• Fixed loans commonly restrict extra repayments to a set annual amount, often around $10,000, with charges beyond it.
• Breaking a fixed rate early can attract a substantial break fee based on the lender's cost of replacing the funding.
• Variable loans usually allow unlimited extra repayments and redraw, which is why many borrowers fix only part of the loan.

1. An offset account is a transaction account whose balance is subtracted before interest is calculated. Every dollar held there works at the loan rate, tax-free.
2. Redraw lets you overpay and retrieve the surplus later. It serves a similar purpose but the money remains in the loan and access terms vary.
3. Offset accounts usually cost more in fees or rate than basic loans - the saving must exceed that cost to be worthwhile.
4. Fortnightly repayment is popular in Australia: 26 half-payments a year equals 13 monthly payments, shortening the term meaningfully.
5. Weekly and monthly options exist too; the frequency rarely changes the total cost unless it causes an extra payment per year.
6. Extra repayments applied consistently in the early years produce by far the largest reduction in total interest.

A basic variable loan with unlimited extra repayments often beats a feature-rich package once fees are counted. Compare the total cost over your expected holding period, not the feature list.

• Serviceability is calculated with a buffer. Lenders do not test you at the advertised rate - they apply a margin above it to ensure you could still repay if rates rose.
• Living expenses are scrutinised using benchmark figures and your declared spending, and recent spending habits are increasingly assessed.
• Income must be verifiable - casual, contract and self-employed applicants typically face stricter documentation.
• Existing debts reduce borrowing capacity more than many expect, including short car loans and large credit limits even when unused.
• A pre-approval gives a realistic ceiling but is not a guarantee - final approval depends on valuation and unchanged circumstances.
• Lower rate does not always mean higher borrowing capacity - lenders apply different buffers and expense models.

Note. A mortgage broker is generally paid by the lender rather than by you and can compare multiple offers at once. If you use one, confirm how they are remunerated and whether they cover the full market.