How mortgage repayments are worked out
Most home loans in New Zealand are table loans. You pay the same amount each time, and each payment covers that period's interest first. Whatever is left pays down the loan.
Early on, interest takes most of each payment because the balance is high. As the balance falls, more of each payment goes on the loan itself. The year-by-year table shows that shift.
The calculator uses the standard formula. The interest for each period is the yearly rate divided by the number of payments in a year. So 6% a year is 0.5% a month, or about 0.115% a week.
Worked example: $600,000 at 6% over 30 years
- Monthly: $3,597.30 a month, 360 payments
- Fortnightly: $1,659.50 a fortnight, 780 payments
- Weekly: $829.58 a week, 1,560 payments
- Total interest on the monthly plan: $695,029, more than the loan itself
What an extra repayment does
Every extra dollar goes straight off the balance, so you pay no more interest on it. On the same $600,000 loan, adding $500 a month on top of $3,597.30 pays it off in 22 years and 1 month instead of 30. It saves $212,713 in interest.
A common approach is to pay half the monthly amount every fortnight. There are 26 fortnights in a year, so that adds up to 13 monthly payments instead of 12. To model it, pick fortnightly and enter the gap between half the monthly payment and the fortnightly figure as an extra repayment.
Fixed and floating rates
Your rate can be fixed for a set period or floating, which means it can change at any time. When a fixed term ends, the loan moves to a new rate and your repayment is worked out again on the balance left. The calculator assumes one rate for the whole term, so treat the totals as a guide and rerun it each time you refix.
Fixed loans often limit how much extra you can repay without a fee. Check with your lender before you plan on large extra repayments.
Your deposit
The deposit is the part of the price you pay yourself. The rest is the loan. You can type it as a dollar amount or as a percentage of the price, and the calculator shows the other figure. A bigger deposit means a smaller loan, lower repayments and less interest over the term.
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Take-home pay calculator →Questions people ask
What are the repayments on a $600,000 mortgage?
At 6% over 30 years, $3,597.30 a month, $1,659.50 a fortnight or $829.58 a week. Total interest on the monthly plan is about $695,029. Change the rate and term in the calculator to see your own figures.
Is it better to pay weekly, fortnightly or monthly?
At the same rate the totals are close. More frequent payments save a little interest because the balance falls sooner. The big saving comes from paying more than the minimum, such as half the monthly amount every fortnight.
How much do extra repayments save?
On a $600,000 loan at 6% over 30 years, an extra $500 a month pays it off in 22 years and 1 month and saves about $212,713 in interest. Enter your own extra amount to see the effect on your loan.
Does the calculator use current bank rates?
No. You enter the rate. The 5.5% it starts with is only an example. Use the rate your bank has offered you, and try a higher one to see what happens if rates rise.
Are fees and insurance included?
No. The figures cover principal and interest only. Bank fees, low-equity margins, insurance and rates are not included.
Is my information saved?
No. The sums run in your browser. Your inputs are kept in the page address so you can bookmark or share a result, and nothing is stored on a server.