General information only — not financial advice. This content is intended as educational guidance. Consult a qualified financial adviser, mortgage broker, or legal professional before making financial decisions. See our full disclaimer.
Your mortgage repayment is calculated using an amortisation formula that spreads the total cost of the loan (principal plus interest) evenly across the loan term. The formula takes three inputs: your loan amount, the interest rate, and the number of payments.For a standard princi
Interest is calculated on the outstanding balance. At the start of a 30-year loan, the balance is at its highest, so the interest portion is largest. As you pay down the principal, less interest accrues and more of each payment reduces the balance. This is called amortisation.
Each 0.25% increase on a $500,000 loan adds roughly $75/month to repayments. On a $750,000 loan, the impact is about $112/month per 0.25% change.
Yes. Most IO loans automatically revert to P&I after the IO period ends. You can also voluntarily switch earlier by contacting your lender. Be aware that P&I repayments will be higher, especially if the remaining term is shorter.
Use our free calculator to get personalised results based on your specific situation. No sign-up required.