Mortgage Calculator Australia — Free 2026
Calculate your Australian mortgage repayments, total interest, LMI and estimated stamp duty. See the true cost of buying a home in Australia.
How It Works
- Enter property and deposit details
- Set your loan terms
- Review your repayment breakdown
Understanding Australian Mortgages in 2026
Australia's mortgage market is dominated by the four major banks (Commonwealth Bank, Westpac, ANZ, and NAB), alongside a growing number of non-bank lenders and credit unions. Unlike the US, Australia does not have a standard 30-year fixed rate product — instead, borrowers typically take a variable rate loan or fix for 1–5 years before reverting to a variable rate. The Reserve Bank of Australia (RBA) cash rate is the primary influence on variable mortgage rates nationwide.
As of early 2026, average owner-occupier variable rates sit around 5.5–6.2%, while 2-year and 3-year fixed rates are broadly similar. The RBA's rate decisions — made at monthly board meetings — are closely watched by millions of Australian mortgage holders. Even a 0.25% change can shift repayments by A$80–A$120 per month on a typical A$600,000 loan.
Fixed vs Variable Rates in Australia
Variable rate loans are the most common in Australia. They allow unlimited extra repayments, access to offset accounts and redraw facilities, and no break costs. The trade-off is rate uncertainty — if the RBA raises rates, your repayments increase. Fixed rate loans lock in your rate for 1–5 years, providing budgeting certainty and protection from rate rises. However, extra repayments are often capped (typically A$10,000/year), offset accounts are usually not available, and breaking a fixed loan early can trigger significant break costs. Many Australians use a split loan — fixing 50–70% for certainty while keeping the rest variable for flexibility.
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the property price (LVR above 80%), most Australian lenders will require you to pay LMI. This one-off premium — typically 1–3.5% of the loan amount — protects the lender if you default, but does not benefit you as the borrower. LMI can be paid upfront or capitalised into the loan (increasing your debt). The Australian Government's Home Guarantee Scheme allows eligible first home buyers to purchase with a 5% deposit and avoid LMI, with the government guaranteeing the remaining 15%.
Offset Accounts
An offset account is one of the most powerful tools available to Australian mortgage holders. Every dollar sitting in your offset account reduces the principal on which daily interest is calculated. A A$650,000 loan with A$50,000 in offset means you only pay interest on A$600,000 — saving tens of thousands over a 30-year term without sacrificing access to those funds. Offset accounts are generally available on variable rate loans and are a key reason many Australians prefer variable over fixed.
Stamp Duty in Australia
Stamp duty (land transfer duty) is levied by each state and territory government, meaning rates vary significantly across Australia. NSW, Victoria, and Queensland have the highest rates for typical purchase prices. First home buyers may receive exemptions or concessions. For a precise stamp duty figure for your state, use our dedicated Australian Stamp Duty Calculator. This mortgage calculator applies a simplified NSW-based estimate for illustration.
Mortgage Stress
The commonly used threshold for mortgage stress is when repayments exceed 30% of gross household income. With median Australian house prices above A$750,000 in Sydney and A$600,000 in Melbourne, many households are at or near this threshold. Understanding your true repayment obligation — including the effect of potential rate rises — is critical for responsible borrowing. Use the interest rate field to model what your repayments would look like if rates rise by 1–2%.
Frequently Asked Questions
Repayments are calculated using standard amortisation: each payment covers the interest accrued on the outstanding balance plus a portion of principal. The formula is P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of payments. An offset account reduces the balance used for interest, lowering each period's interest charge.
LMI is an insurance premium paid by the borrower when the LVR exceeds 80%. It protects the lender — not the borrower — if the borrower defaults. LMI typically costs 1–3.5% of the loan amount depending on LVR, and can be paid upfront or capitalised into the loan. The Australian Government's Home Guarantee Scheme allows eligible first home buyers to avoid LMI with as little as a 5% deposit.
LVR (Loan-to-Value Ratio) is the loan amount expressed as a percentage of the property's value. For example, a A$520,000 loan on a A$650,000 property is an 80% LVR. LVR below 80% avoids LMI and typically attracts lower interest rates. Most Australian lenders cap LVR at 95% for owner-occupiers and 90% for investors.
An offset account is a transaction account linked to your mortgage. The balance in the offset account is subtracted from your loan principal before interest is calculated each day. For example, a A$520,000 loan with A$30,000 in offset means you only pay interest on A$490,000. This can save tens of thousands in interest over a 30-year loan without locking money away.
Fixed rates (typically 1–5 year terms) give payment certainty and protection from rate rises but usually have break costs and limited extra repayments. Variable rates move with the RBA cash rate and offer full flexibility (extra repayments, offset accounts, redraw) but repayments can increase if the RBA raises rates. Many Australians split their loan: part fixed for certainty, part variable for flexibility.
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