Australian Mortgage Calculator

According to ASIC, the comparison rate combines the advertised interest rate with most fees (establishment fees, monthly fees) into a single annual percentage, making it easier to compare the true cost of different home loans.

Lenders are legally required to display a comparison rate alongside any advertised home loan rate. Under the National Credit Code it is standardised on a AUD 150,000 secured loan over 25 years. The comparison rate does not include conditional fees (e.g. early exit fees) or government charges. It reflects the true cost of a loan more accurately than the advertised rate alone.

Based on RBA F6 lending rate statistics (outstanding loans, September 2026):

• Owner-occupier variable P&I: approximately 6.2% p.a.
• Investor variable P&I: approximately 6.5% p.a. (~0.3 percentage point premium)
• 2-year fixed (owner-occ): approximately 6.1% p.a.

The RBA cash rate is 4.85% p.a. (effective 4 November 2026); the September 2026 F6 averages now reflect lender pass-through of the 6 May increase. New loans are generally priced more competitively than older outstanding loan rates.

Common home loan fees include:

• Application / establishment fee: AUD 300–600 one-off (included in comparison rate)
• Valuation fee: AUD 200–600
• Monthly / annual account fee: AUD 10–395 p.a.
• Offset account fee: some lenders charge AUD 10–20/month
• Discharge fee: AUD 150–400 when the loan is closed
• Break cost: on fixed rate loans if exited early — can be substantial
• LMI premium: AUD 10,000–40,000 if LVR exceeds 80%

Per ASIC MoneySmart, the comparison rate together with the lender's full fee schedule reflects the total cost of a loan.

The impact of a rate difference is substantial due to compounding over a long term. On a AUD 600,000 loan over 30 years:

• At 6.00% p.a.: total interest is approximately AUD 695,000
• At 5.50% p.a. (0.50 pp lower): total interest is approximately AUD 626,000 — about AUD 69,000 less
• At 6.50% p.a. (0.50 pp higher): total interest is approximately AUD 765,000 — about AUD 70,000 more

Even a 0.25 percentage point difference on a AUD 600,000 loan changes total interest by approximately AUD 35,000 over 30 years. A rate difference of this size therefore has a substantial effect on total interest paid.

A fixed rate gives certainty — repayments do not change for the fixed period, regardless of RBA movements. It suits borrowers who need budget certainty or expect rates to rise during the fixed period. Extra repayments are usually capped and break costs apply on early exit.

A variable rate moves with market rates — borrowers benefit from cuts but are exposed to rises. Variable loans usually allow unlimited extra repayments and no break costs. According to ASIC MoneySmart, a split loan — part fixed, part variable — combines certainty on a portion with flexibility on the rest, and is a popular middle-ground option.

Making fortnightly repayments (26 per year) instead of monthly (12) is effectively equivalent to making one extra monthly repayment per year — because 26 fortnightly payments equals 13 monthly payments worth of money.

On a AUD 600,000 loan at 6.00% p.a. over 30 years, paying half the monthly repayment every fortnight saves approximately AUD 149,000 in interest and cuts around 5.5 years off the loan term. The saving comes from paying down principal faster — not from frequency alone. Aligning repayment frequency with the pay cycle is the most practical approach.

Extra repayments directly reduce the outstanding principal, so less interest accrues on every future repayment. On a AUD 600,000 loan at 6.00% over 30 years:

• Adding AUD 500/month extra saves approximately AUD 213,000 in total interest and cuts around 7–8 years off the loan
• Adding AUD 200/month saves approximately AUD 107,000 and around 4 years

Savings are largest when extra repayments are made early in the loan — because the balance (and therefore the interest charged) is highest. Fixed rate loans may restrict extra repayments — check the loan contract.

When a fixed rate period ends, the loan automatically reverts to the lender's standard variable rate, which is typically higher than the lender's advertised new customer rate.

According to ASIC MoneySmart, the revert rate (also called the rollover rate) is often 0.5–1.5 percentage points higher than competitive variable rates. The difference between a revert rate and a competitive rate compounds over the remaining loan term. ASIC refers to the gap paid by borrowers who remain on revert rates as the loyalty tax.

Mortgage stress is commonly defined as spending more than 30% of gross household income on mortgage repayments. According to ASIC MoneySmart, when assessing affordability, lenders must assess ability to service the loan at an interest rate 3 percentage points higher than the current rate (the serviceability buffer).

Factors associated with lower repayment risk include an LVR below 80%, a repayment buffer held in an offset account, and a loan term matched to repayment capacity. Borrowers already in stress can contact their lender — under the NCCP Act they have the right to request a hardship variation.

First home buyers in Australia have access to several schemes:

• First Home Guarantee (FHG): buy with a 5% deposit without LMI. From 1 October 2025, income caps were removed and unlimited places are available (Housing Australia)
• Help to Buy: shared equity scheme with the government taking up to 40% equity on new homes (10,000 places per year)
• First Home Super Saver (FHSS): withdraw voluntary super contributions (up to AUD 50,000) at a concessional tax rate for a deposit (ATO)
• First Home Owner Grant (FHOG): state-based cash grant for new homes (AUD 10k–30k depending on state)
• Stamp duty concessions: full or partial exemptions in most states

Property price caps apply to all schemes.

From 1 October 2025, the Federal Government significantly expanded the First Home Guarantee:

• No income caps: the previous AUD 125,000 single / AUD 200,000 couple limits were removed
• Unlimited places: the previous 35,000-per-year cap was removed
• 5% deposit, no LMI: still the core feature — government guarantees up to 15% of the property value
• Single Parent Stream: 2% deposit option available for eligible single parents
• Regional FHG: merged into the FHG (no separate regional stream)

New property price caps: Sydney AUD 1.5M · Melbourne AUD 950k · Brisbane AUD 1M · Adelaide AUD 900k · Perth AUD 850k · Hobart AUD 700k · Darwin AUD 600k · ACT AUD 1M.

The First Home Super Saver (FHSS) Scheme allows eligible first home buyers to withdraw voluntary superannuation contributions made after 1 July 2017 to use as a home deposit.

According to the ATO, withdrawals can be up to AUD 15,000 per financial year of voluntary contributions, with a lifetime maximum of AUD 50,000. Withdrawals are taxed at the marginal rate minus a 30% tax offset — typically more tax-efficient than saving in a normal bank account. A FHSS determination from the ATO is required before settlement (rule updated 15 September 2024).

Most lenders require a minimum deposit of 5% of the purchase price, though borrowing above 80% LVR triggers Lenders Mortgage Insurance (LMI). A 20% deposit avoids LMI entirely and typically gives access to better rates.

For a AUD 750,000 property: 5% deposit = AUD 37,500 (but LMI of AUD 20,000–30,000 likely); 20% deposit = AUD 150,000 (no LMI). The First Home Guarantee allows eligible buyers to purchase with just 5% without paying LMI.

Additional upfront costs include: stamp duty (unless exempt), conveyancing (AUD 1,000–2,500), building inspection (AUD 400–600), and loan application fees.

Under APRA's lending rules, lenders must assess a borrower's ability to service the loan at an interest rate at least 3 percentage points above the loan's actual rate. If a loan is offered at 6.00%, the lender must test that the borrower can afford repayments at 9.00% p.a.

This buffer exists to protect borrowers from rate rises and is set by APRA (Australian Prudential Regulation Authority). According to ASIC MoneySmart, this buffer reduces maximum borrowing capacity compared to what the loan's face rate alone would suggest — typically reducing the maximum loan by 15–20%.

According to the ATO, mortgage interest on a residential investment property is fully deductible against rental income in the year it is incurred — from the date the property is available for rent.

If total deductible expenses (including interest) exceed rental income, the property is negatively geared and the net rental loss can be offset against other assessable income such as salary, reducing the overall tax liability. Mortgage interest on a primary place of residence (owner-occupied) is not tax deductible.

According to the ATO, a rental property is negatively geared when total deductible expenses — including mortgage interest, property management fees, council rates, insurance, and repairs — exceed the rental income received.

The net rental loss can be offset against other assessable income (salary, wages), reducing overall tax liability. A AUD 15,000 annual rental loss at a 37% marginal rate provides an estimated AUD 5,550 annual tax benefit. The strategy relies on capital growth over time to provide an overall positive return.

For investment property mortgages, the tax treatment of an offset account differs from extra repayments made via redraw.

According to the ATO, if extra repayments are made and then redrawn for private use, the ATO may treat the redrawn funds as a new private loan — making the interest on that portion non-deductible. Money held in an offset account retains its character (private savings) and does not affect the loan's tax-deductible status.

For owner-occupied properties, the distinction is less important because the interest is not deductible anyway — extra repayments via redraw are equally effective.

According to the ATO, individuals and trusts who dispose of a CGT asset (including an investment property) that has been held for more than 12 months are eligible for a 50% CGT discount — only half of the net capital gain is included in assessable income.

A AUD 200,000 capital gain on a property held for 3 years is reduced to AUD 100,000 assessable income before tax. The CGT discount does not apply to rental income, to companies, or to properties held for less than 12 months. The cost base includes purchase price plus acquisition costs (stamp duty, legal fees) and capital improvements.

How P&I, IO, offset, and affordability calculations are performed — these are the same formulas used by all Australian lenders.