Extra repayments calculator

The Extra Repayments Calculator calculates the time saved to pay off the loan and the amount of interest saved if repayments are increased by the entered amount of extra contribution per repayment period after the loan has been in force for the entered number of years. The calculation is done at the repayment frequency entered, in respect of the original loan parameters entered, namely amount, annual interest rate and term in years.

Calculations are based on interest rates for owner occupiers for some products, and results will vary if loan is for investment purposes.

The assumptions used in this calculator are as follows:

• Length of Month All months are assumed to be of equal length. In reality, many loans accrue on a daily basis leading to a varying number of days' interest dependent on the number of days in the particular month.
• Number of Weeks & Fortnights in a Year One year is assumed to contain exactly 52 weeks or 26 fortnights. This implicitly assumes that a year has 364 days rather than the actual 365 or 366.
• Rounding of Amount of Each Repayment In practice, repayments are rounded to at least the nearer cent. However the calculator uses the unrounded repayment to derive the amount of interest payable at points along the graph and in total over the full term of the loan. This assumption allows for a smooth graph and equal repayment amounts. Note that the final repayment after the increase in repayment amount will be a partial repayment as required to reduce the loan balance to zero.
• Rounding of Time Saved The time saved is presented as a number of years and months, for all available repayment frequency options, namely monthly, fortnightly & weekly. This is rounded down to the next lower month and hence is slightly conservative.
• Amount of Interest Saved In contrast to the calculation of time saved, the calculation of the amount of interest saved is not rounded and is shown to full accuracy including the number of cents. This amount can only be approximated from the amount of time saved.