In short: This calculator shows how much sooner you clear your home loan, and how much interest you avoid, by paying more than the minimum. The rule of thumb is striking: an extra $200 a month on a $650,000 loan at 6.00% p.a. cuts almost four years off a 30-year term and saves around $108,000 in interest.
- Loan paid off5.0 years sooner
- New payoff time23.0 years
- Minimum repayment$3,383.18
- Your repayment with extra$3,683.18
Assumes extra repayments start now and continue for the life of the loan at a constant rate.
Interest saved: $122,869
That is a general estimate on standard assumptions. Every lender applies its own expense benchmarks, income shading and policy, so the real figure moves from lender to lender. Gorakh spent years as a senior credit officer deciding exactly these questions. Send him the numbers above and he will tell you what is realistic and which lenders fit — at no cost to you for home loans.
- A former senior credit officer reads itGorakh assessed loan applications on the lender side before he became a broker.
- A real office you can visit23 Astbury Crescent, Mickleham VIC 3064 · ABN 90 160 461 553
- Fees and complaints in writingRead the Credit Guide and our complaints and AFCA process before you commit to anything.
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Extra repayments are the cheapest way to save on a mortgage: no application, no fees, no new lender.
How this calculator works
The tool runs your loan through the standard amortisation schedule twice: once at the minimum repayment, once with your extra amount added. Interest is calculated monthly on the reducing balance, so every extra dollar cuts interest in every following month.
What it can model
- A regular extra amount each month, fortnight or week, starting now or from a future date.
- A one-off lump sum, such as a bonus, tax refund or inheritance.
- Both together.
The saving reported is the difference in total interest between the two schedules.
Assumptions
The rate stays constant, the extra payments continue for the life of the loan, and your lender allows unlimited extra repayments. Most variable loans do; many fixed loans cap extra repayments at around $10,000 a year or charge break costs above that.
How to use the result
Pick an extra amount you can sustain, not the biggest number that looks impressive. Then decide whether to pay directly onto the loan or hold the money in an offset account, which delivers the same saving while keeping the cash accessible. Our guide on offset versus redraw explains which suits your situation.
Worked example
A Mernda couple with a $650,000 loan over 30 years (for illustration, at 6.00% p.a.), minimum repayment $3,897 a month:
| Strategy | Loan paid off in | Total interest | Interest saved |
|---|---|---|---|
| Minimum only | 30 years | $752,948 | |
| Extra $100 a month | 28 years | $694,088 | $58,860 |
| Extra $200 a month | 26.3 years | $644,819 | $108,129 |
| Extra $300 a month | 24.9 years | $602,812 | $150,136 |
| Extra $500 a month | 22.5 years | $534,642 | $218,306 |
| $20,000 lump sum in year one | 27.6 years | $660,664 | $92,284 |
The first $100 a month buys the biggest saving per dollar; beyond $500 the returns per dollar taper as the term shrinks.
What this calculator doesn't include
- Redraw fees or minimum redraw amounts, which some lenders charge when you take extra repayments back.
- The tax angle for investors. Paying down an investment loan reduces deductible interest, so investors often use an offset instead; see the investment property guide.
- Fixed-rate break costs if you exceed the annual extra repayment cap.
- Rate rises or cuts over the term, which change the saving but not the direction of the result.
Tips to improve the outcome
- Start early. The same $200 a month saves far more in year one than in year twenty because the balance is larger.
- Switch to fortnightly repayments of half the monthly amount; you make the equivalent of one extra monthly repayment a year without noticing.
- Round the repayment up to the nearest $100 and treat it as the real minimum.
- Send windfalls (tax refunds, bonuses, pay rises) straight to the loan or offset before they are absorbed into spending.
- After a rate cut, keep paying the old amount. The difference becomes an automatic extra repayment.
- If your loan is well above the market rate, refinancing first means every extra dollar works harder.
Frequently asked questions
How much faster can I pay off my mortgage with $100 extra a month?
On a $650,000 loan at 6.00% p.a. over 30 years, an extra $100 a month clears the loan two years early and saves about $58,860 in interest. On a $400,000 loan the same $100 saves fewer dollars but cuts more time, because it is a larger share of the repayment.
Is it better to make extra repayments or put money in an offset account?
The interest saving is identical if the amounts are the same, because both reduce the balance interest is calculated on. An offset keeps the money instantly accessible and, for a future investment property, preserves the tax deductibility of the loan. Extra repayments suit people who prefer the discipline of money they cannot easily spend.
Should I pay a lump sum off my mortgage?
Usually yes, if you have an emergency fund left over. A $20,000 lump sum on a $650,000 loan at 6.00% saves about $92,284 in interest and 2.4 years. Paying it into an offset account gives the same saving with the option to take it back. On a fixed rate, check that the lump sum stays within your lender's annual cap.
Can I make extra repayments on a fixed rate home loan?
Most lenders allow limited extra repayments during a fixed period, commonly up to $10,000 a year, though some allow more or none. Going over the cap can trigger break costs. If you expect to pay extra, a split loan with a variable portion lets you make unlimited extra repayments on that part; the split loan calculator shows the mix.
Do extra repayments reduce my minimum repayment?
Not automatically. Your scheduled repayment stays the same and the loan simply finishes earlier. Some lenders will recalculate the minimum on request after a large lump sum, which lowers the repayment but gives up much of the saving. If money is tight, that option is worth knowing; see mortgage stress: what to do.
Talk to GNT Finance
The right loan makes extra repayments effortless: no caps, free redraw and an offset that actually offsets. GNT Finance can check whether your current loan supports the strategy or whether a switch would let your extra dollars go further. Book a free consultation or call 0426 403 703.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.