Mortgage Scenario Calculator

Current Mortgage
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40.0 
Scenario 1
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40.0 

How to Use This Calculator

This calculator helps you compare different mortgage scenarios to find the best strategy for paying off your mortgage faster or within your budget. Often when coming up to refixing a mortgage it can be quite confusing comparing all the various mortgae rates and the long term implications.

Step 1: Enter Your Loan Details

  • Mortgage Amount ($): Enter your total mortgage amount or remaining balance
  • Payment Frequency: Choose how often you want to make payments (weekly, fortnightly, or monthly)
  • Loan Term (Years): Enter the remaining years on your mortgage term (maximum 40 years)

Step 2: Compare Different Scenarios

Each column represents a different scenario you can compare. For each scenario you can:

  • Payment Amount: Adjust the regular payment amount - increasing this will reduce the years to pay off your mortgage
  • Interest Rate (%): Enter different interest rates to compare
  • Interest Only: Check this box if you want to calculate the interest only.
  • Lump Sum Payment ($): Add an optional lump sum payment to see how it affects your mortgage

Understanding the Results

  • Remaining Principal: Your mortgage balance after any lump sum payment
  • Monthly Equivalent: Shows the monthly payment amount for easy comparison
  • Yearly Total: Total payments made in a year
  • Lifetime Total: Total amount you'll pay over the life of the mortgage (including any lump sum)
  • Years to Pay Off: How long it will take to pay off the mortgage with the current settings

Tips

  • Use the "Add Comparison Column" button to add more scenarios to compare
  • Try different combinations of interest rates and lump sum payments to find the best strategy
  • Increase the regular payment amount to see how much faster you could pay off your mortgage

Important Notes

  • Interest Rate Assumption: The calculator assumes the interest rate remains fixed over the entire life of the loan
  • Bank Limitations: Your bank may have restrictions on:
    • Maximum additional regular payment amounts
    • Early repayment fees or penalties for lump sum payments
    • Maximum lump sum payment amounts
    Please check your loan agreement or contact your bank for specific terms and conditions.

Mortgage Words of Wisdom

Paying Off Your Mortgage Faster

  • Increase Your Regular Payments: By increasing your regular mortgage payments, even by a small amount, you can significantly reduce the total interest paid over the life of the loan. This is because more of your payment goes towards the principal, reducing the balance faster.
  • Make Bi-Weekly Payments: Instead of making monthly payments, consider making bi-weekly payments. This effectively results in one extra payment per year, which can reduce your loan term and save you money on interest.
  • Round Up Your Payments: Rounding up your mortgage payments to the nearest hundred can make a noticeable difference over time. This small increase can help you pay off your mortgage faster without a significant impact on your monthly budget.

Benefits of Lump Sum Payments

  • Reduce Principal Faster: Making a lump sum payment directly reduces the principal balance of your mortgage. This can lead to lower interest costs over time and a shorter loan term.
  • Take Advantage of Refix Opportunities: When your mortgage is up for refix, it's an excellent time to make a lump sum payment. This can help you lock in a lower balance at potentially lower interest rates, maximizing your savings.
  • Flexibility and Financial Freedom: Paying off your mortgage faster gives you more financial flexibility and peace of mind. It can free up funds for other investments, savings, or personal goals.

Why Consider These Strategies?

  • Interest Savings: The primary benefit of paying off your mortgage faster is the reduction in total interest paid. Over the life of a mortgage, interest can add up to a significant amount, so reducing this can lead to substantial savings.
  • Financial Security: Owning your home outright provides financial security and reduces monthly expenses, which can be particularly beneficial in retirement.
  • Investment Opportunities: With your mortgage paid off, you can redirect funds towards other investments, potentially increasing your wealth over time.
  • Peace of Mind: Reducing debt can provide peace of mind and reduce financial stress, allowing you to focus on other aspects of your life.