Extra Repayment Calculator

Regular Extra Payments and Lump Sums

Extra repayments reduce the loan balance that attracts interest. A regular extra payment repeats at the frequency you choose. A lump sum reduces the balance once, on the date you enter.

Enter the required repayment separately from the extra amount. The calculator keeps that required payment unchanged in both schedules, so the comparison isolates your extra payments and any offset balance. Extra payments start one chosen payment period after the calculation start.

The model accrues daily interest at the annual rate divided by 365, including in leap years. It charges that interest at each required repayment. If a required payment and an extra payment share a date, the required payment is processed first.

Interest is calculated on the balance before each day's cash events. A lump sum on the calculation start reduces principal before interest begins. An extra payment between required repayments reduces principal immediately, with accrued interest settled at the next required payment or at final payoff.

Reading the Mortgage Payoff Date

The payoff date is when the model's last payment clears the loan and any accrued interest. The final payment is capped at the amount still owed. Interest stops once the debt reaches zero.

Use the remaining term from today's loan statement, rather than the original term when the loan began. The remaining-term field provides context. Your entered payment determines the calculated payoff, so an inconsistent payment can produce a date beyond that term.

Monthly payment dates retain the starting day where possible and use the last day of a shorter month. Weekly and fortnightly payments fall seven and 14 days apart. The calculator does not move payments for weekends or public holidays.

If a payment is too small to clear the loan within 100 years, the calculator shows no payoff date and marks dependent totals unavailable. Increase the required payment or test a larger extra amount. This is an illustration, not a lender payout quote.

An Early-Payoff Example

The starting example has a $500,000 balance, a 6% annual rate and required monthly repayments of $2,997.75. It uses the starting calculation date shown above, daily interest and no offset or lump sum. The rounded required payment and daily-interest convention produce 361 monthly payments in the baseline.

At an extra $200 per month, total interest falls from $580,107 to $476,636. The loan clears in 306 monthly payments and the final payment is $1,322.00. Keeping the same required payment lets the interest saving shorten the loan.

A personal loan or car loan with reducing-balance interest can use the same comparison. Balloon payments, flat-rate interest and early-termination charges need a product-specific calculation. This calculator excludes those amounts.

Loan Restrictions to Check

Fixed-rate loans can limit extra repayments and charge break costs when you exceed the allowance. Check the loan contract's allowance, the period it covers and the lender's break-cost quote before paying a lump sum. These costs can reduce the saving shown here.

Moneysmart's guide to paying off a mortgage faster explains extra repayments and lender fees. Redraw access also depends on the product, so a payment into the loan is not a promise that you can withdraw it later.

The result assumes a constant rate and unchanged required repayments. A rate change, repayment recalculation or fee can change the payoff date. Use the repayment and rate from the loan you are modelling.

Combining an Offset With Extra Repayments

An offset reduces the loan balance used to calculate interest while leaving the cash in a separate account. Extra repayments reduce the debt itself. The calculator combines both effects without treating the offset balance as a lump sum.

The offset input assumes a constant balance in a 100% offset account. Interest is calculated on the greater of zero or the loan balance minus that cash. An offset equal to the debt removes interest in the model, but repayments still have to clear the principal.

The baseline has neither extras nor an offset, so its interest saving includes both changes. To isolate the offset effect, enter zero for extra payments and the lump sum. For an extra-repayment comparison alone, leave the offset at zero.

Moneysmart explains how mortgage offset accounts work, including fees and partial offsets. Allow for those product terms before deciding whether to retain the cash or pay it into the loan.