Mortgage repayment calculator methodology
Amortisation, rate-change and offset assumptions.
Scheduled monthly repayment
Using principal B, monthly nominal interest rate r (annual percentage divided by 1200), and n months, scheduled repayment is B × r / (1 − (1+r) to the power −n). At 0% interest it is B / n. At the entered rate-change month, the scheduled payment is recalculated for the outstanding balance over the remaining original term.
Monthly interest and principal
Interest in month m is max(0, outstanding balance less offset balance) × nominal annual percentage / 1200. Principal paid is scheduled plus extra repayment less interest, capped at outstanding principal. Offset balances may grow monthly; they reduce interest but are not principal repayments. A fully offset mortgage may still require scheduled repayments.
Interpretation
The calculator returns initial scheduled repayment, total interest, monthly schedule, actual total repayments, payoff month and a no-extra/no-offset interest baseline using the same rate-change assumption. The full schedule is exportable as CSV.
Monthly and calendar settings
The default monthly, gross-balance repayment model divides the nominal annual rate by 12. Advanced settings support calendar-dated weekly, fortnightly or monthly payment schedules and a daily ACT/365 interest option. Offset growth is applied in monthly steps. For weekly and fortnightly schedules, choose an equivalent annual payment amount or the half-monthly strategy: these commit different annual cash amounts.
What an offset changes
A full offset reduces the balance used to calculate interest, floored at zero. It does not repay principal. The optional net-of-offset minimum-payment basis is a modelling setting, not a claim that a specific lender will reduce required repayments. The redraw comparison separately illustrates minimum payments based on actual debt versus debt plus available redraw; interest still uses actual debt.
Limitations
Lender calendars, fees, interest posting and minimum-payment practices can differ. This model does not establish lender policy, calculate tax or predict approval. For a refinance term reset, compare matching total cash flows as well as debt and offset balances. Read the 30-year refinance and offset example.
Verification examples
- $600,000 at 6% over 30 years: approximately $3,597.30 scheduled payment per month.
- $12,000 at 0% over 12 months: $1,000 monthly, no interest.
- Full offset of loan balance: zero interest while the offset fully covers principal.
- A rate change in month 1 yields the same amortisation as a loan starting at that new rate.
Independent numerical fixtures: tests/gps-mortgage-math.test.js.
Sources: Moneysmart mortgage calculator; Moneysmart mortgage offset accounts.