Mortgage Calculator: How do I calculate my mortgage repayments?

Use this Mortgage Calculator to see what your mortgage repayments will be


Ed McKnight

Economist, property investor and host of the Property Academy Podcast
Mortgage Calculator

Mortgage Calculator and Loan Repayment Calculator

The mortgage is the most significant expense in any investment property. While many investors will use an interest-only mortgage – where the principal doesn't go down – others will prepare to use a standard principal and interest mortgage.

You can calculate what your payment would be for a principal and interest mortgage using the above mortgage calculator, or use the interest-only mortgage calculator if you're an investor wanting to see the interest payments you'd make using an interest-only mortgage.

How to use the calculator

How to Use the Mortgage Calculator

Four factors are used to calculate the size of your mortgage repayments:

  • The amount of the lending you take out, e.g. $500,000
  • The interest rate that the bank charges you, e.g. 4%
  • The length of your loan, e.g. 30 years
  • The frequency you make a payment, e.g. weekly

You can play around with each of these factors in the mortgage calculator and see the effect that would have on your mortgage repayments, and the total amount of interest you would pay over the life of the home loan.

While you’re using the mortgage calculator, bear in mind that as well as using the slide bars to select your interest rate and mortgage term, you can also type in the exact term or interest rate on the right-hand side. This will give you a more accurate repayment amount.

Mortgage Calculator NZ
How the calculator works

How the Mortgage Calculator Works

This mortgage calculator will work out your repayments as if it is a standard table mortgage. This is where your entire home loan is on the same interest rate (which doesn’t always have to be the case).

It uses an amortisation table to work out how much you have to repay each week, fortnight or month to completely pay off the principal of the loan and all of the interest – while paying the exact same amount every single time, as long as your interest rate doesn’t change.

Mortgage Calculator NZ

Say you took out a $500,000 mortgage at 4% over 30 years and paid the mortgage weekly, you would pay $550.50 every single week for those 30 years.

It should be said that in actual fact, your interest rate will move and your mortgage repayments will change every few years depending on how long you fix your interest rates for. As your interest rates change, your repayments will be recalculated.

Interpreting your results

Interpreting the Mortgage Calculator Results

As you play around with the mortgage calculator, you will notice five results that are presented to you:

  • Your repayment amount
  • The total value of your repayments
  • The total value of your interest costs
  • Your principal payments as a %
  • Your interest payments as a %
How much will my mortgage repayments be

Repayment Amount

Your mortgage repayment, whether it be weekly, fortnightly or monthly is probably what you are most interested in. It is also the most self-explanatory. It’s the amount that you’re going to pay each period.

If you borrow $500,000 from the bank at 4% interest over 30 years and make a weekly repayment, you will pay the bank $500.50 per week.

Mortgage Repayments Calculator

Total Value of Your Repayments

The total value of your repayments is the total amount you will pay to the bank over the term of your mortgage.

Using the same figures as above ($500K home loan, 4% interest, 30 year term, weekly repayment), you will make total mortgage repayments to the bank of $858,778.

You can also calculate this by taking your weekly repayment ($550.50) and multiply it by 52 to get your annual repayment ($28,626) and then multiply it by 30 to get your total mortgage repayment.

Just be aware that this mortgage calculator uses some rounding, so it may be a few dollars off, depending on the figures you use.

Mortgage Calculator Repayments

Interest Cost

While 3.39% interest sounds really cheap, interest is actually one of the most expensive purchases you will ever make in your life – especially after you calculate your total interest payments using a mortgage calculator.

Using the above figures, you would pay $358,778 to the bank in interest over the 30 year period of the loan, which is 71.8% of the value of your initial mortgage. And you wonder how the bank’s make multi-billion dollar profits!

Mortgage Calculator nz

Principal Payments and Interest Payments (%)

The last two results calculate where your total repayments go. If your total mortgage repayments were $858,778, and you paid $358,778 in interest, then you paid back $500,000 in principal payments i.e. the whole mortgage. This means of your total repayments, 58.2% went towards paying down the principal and 41.8% went to paying interest costs.

Next steps

What to Do After You've Used the Mortgage Calculator

Ok, you’ve used the mortgage calculator and are comfortable with your repayments. How do you go about actually getting a mortgage?

Your next step is to use a mortgage broker to negotiate with different banks to secure your mortgage.

Sure, you can approach banks directly and negotiate yourself. But, there are a whole heap of benefits to using a mortgage broker. The top 4 are:

  • Mortgage brokers will negotiate the lowest interest rate possible with each bank, which will save you money. A 0.1% decrease in interest rate from 4% to 3.9% on a 30 year $500,000 mortgage will save you $10,333 over the life of your home loan
  • Your mortgage broker will also make sure you get the lending you want. They’ll work with different banks to see which ones will actually lend to you … not every bank is going to approve your mortgage. Their job is to get you the funds you’re after
  • A mortgage broker will project manage the process of getting your mortgage. They’ll chase you up if you haven’t completed a task and will make sure the whole process works
  • Best of all, mortgage brokers don’t cost you anything, because they are paid a commission from the bank.

If you’re not ready to get a mortgage yet and want to learn more, then read our Epic Guide to Mortgages, which will teach you everything you need to know in order to get a mortgage and then pay it off.

Decreasing your repayments

Decreasing the Size of Your Repayments

If you are a property investor, you may want to minimise the mortgage repayments you make to the bank.

That’s because if your mortgage payments are too high, you may have to sell your properties early, or limit the size of your portfolio, which decreases the potential capital gains you could make.

That's why using this mortgage calculator, you will notice that there are four ways to reduce your loan repayments:

  • Decreasing the initial size of the mortgage, e.g. $400,000, rather than $500,000. However, this may not be the best option as you may need to purchase a cheaper investment, which may not be a good quality investment.
  • Negotiating a lower interest rate with your bank, e.g. 3.5%, rather than 4%. This is arguably your best option if you are set on taking out a principal and interest mortgage, rather than one that is interest-only
  • Lengthening the term of the loan, e.g. 30 years, rather than 25
  • Moving to an interest-only loan, which means that you pay back none of the principal of the loan, and it will always be there.
Related calculators

Other Calculators You Can Use

Another strategy is to decrease the size of your mortgage by using a larger cash deposit. However, this isn't always achievable for first-time investors, who use tools like our equity calculator to purchase properties without any cash.

Use our capital growth calculator to see what your capital gains might be.

This mortgage calculator can tell you what your mortgage repayments will be. However, mortgage repayments are only one expense. To see the financial picture of your investment, use our property investment calculator.

You may also want to see whether the property will earn you money each week, or require additional investment to keep going. Use our rental yield calculator to run these numbers.

If you want to run the numbers using another method, Opes has a full range of other calculators that you can find and use.


Frequently Asked Questions About Mortgages

How much does my salary need to be for a mortgage?

One of the criteria you need to satisfy to have a mortgage approved is whether you have enough money to afford the repayments on the mortgage. This is called 'servicing'.

The salary you need to service your mortgage will depend on the size of the mortgage and what the current interest rate is. The higher your mortgage the higher your salary needs to be.

In addition to this, the banks use a 'servicing test rate' which assesses whether you can afford your mortgage at a higher interest rate while making principal and interest repayments.

How much is my mortgage on a 500k house?

If you recently purchased a property for $500,000 and put a 20% deposit towards it, that would result in a mortgage of $400,000. If you had a fixed interest rate of 4%, your monthly mortgage repayments on a 30-year mortgage would be $1,910.

How much will a $200,000 mortgage cost over 30 years

Firstly, it depends on the interest rate you have for your mortgage. Lets say you have a fixed interest rate at 4.5% for your $200,000 mortgage over 30 years. Your monthly mortgage repayments would be $955.

Are mortgages easy to get right now?

At this point in time there are a lot more mortgages being declined than in the past and this is due to the change of Loan to Value Ratio restrictions on properties.

Additionally, even if you could afford the repayments the banks servicing test rates which "stress test" your application could be the reason why they don't accept it. The calculations they generally apply are:

  • Interest rates tested at 7%
  • Any rent received will be scaled down by 25%
  • Any boader or flatmate income will be scaled down by 50%
  • your repayments will be tested on a principal and interest loan for the remainder of the term

Ed McKnight

Ed McKnight is the host of the Property Academy Podcast – NZ's #1 business podcast. He is an economist, having studied at the University of Auckland and the University of Waikato. He's a frequent writer for Informed Investor Magazine and has contributed to NewsHub, Stuff, OneRoof and Property Investor Magazine.