How much do extra repayments save on a mortgage?

On a $500,000 loan at 5.5% with 25 years remaining, paying an extra $500 per month saves approximately $119,000 in interest and cuts 6 years and 3 months off the loan term. The earlier you make extra repayments, the greater the total saving.

Is it better to make extra repayments weekly or monthly?

More frequent extra repayments save slightly more interest because the principal reduces sooner. However, the difference is modest — the AMOUNT of extra repayment matters far more than the frequency. Weekly $115 saves only marginally more than monthly $500.

Can I make extra repayments on a fixed rate loan?

Most Australian fixed rate loans allow extra repayments up to $10,000–$20,000 per year. Above that limit, early repayment fees may apply. Variable rate loans typically allow unlimited extra repayments.

Should I put extra money into an offset account or make extra repayments?

Both reduce interest. Extra repayments permanently reduce the loan balance — funds aren't easily accessible again. An offset account holds savings separately while offsetting interest, keeping money accessible. If you need flexibility, an offset is generally better; if discipline is the priority, direct extra repayments work just as well.

What is the effect of a lump sum repayment?

A one-off lump sum (tax return, bonus, inheritance) directly reduces principal. A $10,000 lump sum on a $500,000 loan at 5.5% with 25 years remaining saves approximately $18,000 in total interest and cuts ~9 months off the term — assuming no further extra repayments.

Extra repayments calculator — see how much you can save

See exactly how much extra repayments save on your Australian home loan. Enter your loan balance, interest rate, and extra amount — instantly see interest saved, years cut, and your new payoff date. Includes lump sum calculator and amortisation chart. Free, no sign-up.