Extra Repayment Calculator
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Even though you assess every factor precisely before obtaining a loan, sometimes loan repayment becomes an intricate task.
If you are determined to repay your home loan, you must clear your finances. The home extra repayment mortgage calculator will give you a clear idea of how much interest and EMI you will have to pay on the loan.
An extra repayment mortgage will let you save a substantial amount of money on the interest rate of your home loan. By comprehending your additional loan repayment and using a home loan extra repayment calculator, you can plan to close your home loan easily and quickly if you have the required funds for it.
Eventually, apprehending how much money you are spending on your extra mortgage repayment and how much you still have to settle - is key to devising your financial success.
What is Home Loan Extra Repayment?
Home loan extra repayment refers to your home mortgage/loan repayments. It means you pay more than the minimum monthly amount you must make based on the loan agreement terms.
If you have additional funds, you can make repayments frequently by paying a bit more than your minimum monthly repayments. Or, you can also opt to pay irregular lump sum amounts into your loan account besides the minimum repayment amounts defined by your lender.
What is a Home Loan Extra Repayment Calculator?
A home loan extra repayment calculator is an online tool used to determine the monthly EMI (Equated Monthly Installment) amount and the total amount the borrower has to pay at the end of tenure.
The monthly repayment calculator for mortgages gives you a fair idea of the total loan repayment amount. Based on the values, you can plan your finances and ensure how much loan you should obtain so that you don’t struggle to repay later.
How Does UM Oceania's Home Loan Extra Repayment Calculator Work?
An extra repayment calculator for loans comes with some amazing features and benefits. They are as follows:
Simple, Accurate, Convenient, and Instant
Since you are already struggling to pay off the existing home loan, it means something has already gone, and you can’t afford others to make any mistakes like errors with the numbers. A single mistake can cost you a hefty. Therefore, use an extra loan repayment calculator. The tool effectively determines precise values and renders accurate results every time. Besides, it is quick and easy to use.
Makes Calculation Easier
The extra repayments loan calculator uses the formula embedded in the system to determine values. If you have entered the values correctly, it hardly takes a second to return the precise output. You don’t need complex mathematical calculations to identify instalment amounts.
Compare Different Home Loan Offers
Since Urban Money Oceania’s calculator is flexible and free to use, you can compare home loans of n number of banks. The results will represent the total cost of borrowing together with each instalment. In turn, you can narrow down the best alternatives and choose a loan that matches your requirements.
When you take a loan, it’s quite apparent that your finances struggle. However, plan everything and use the additional repayment calculator to determine the monthly payment you have to make for loan repayments. You will be able to plan your finances better. This will help you set a budget more efficiently. Moreover, you will know what amount will fit your bill.
No Personal Details Needed
One of the best things about using an extra repayment mortgage calculator is that you don’t have to reveal your identity or personal details. Hence, there are no security issues.
Features and Benefits of Home Loan Extra Repayment Calculator
Urban Money Oceania’s extra repayments loan calculator is an easy-to-use online device to calculate monthly repayment on home loans. The calculator requires users to furnish a few inputs based on which the tool returns the required outputs.
The desired inputs are as follows:
- Loan Amount: The desired amount you want to borrow for a home loan.
- Term/Tenure: It is the timeframe for loan repayment. For instance, if you wish to repay a loan in 20 years, you can enter 20 in the required field.
- Repayment Type: The section refers to the kind of repayment amount you wish to know. For example - you must choose ‘Principal and Interest’ if you wish to know the total principal and interest amount at the tenure end. Or you can choose interest only one year, interest only two years, etc.
- Interest Rate: Enter the interest rate you wish to, or the lender is willing to offer you the home loan.
- After providing the required information in the mandatory fields, click on calculate. The tool will return the following output values:
- Total Loan Repayment: The total amount you will repay on your home loan until the tenure end.
- Total Interest Charged: The amount you will have to pay besides the actual loan amount you have obtained.
Things You Should Know about Home Loan Extra Repayment Calculator
Here are the following things you must know about the Home Loan Repayment calculator:
- It’s a self-help tool that allows you to determine the extra amount you have to pay monthly to repay your loan sooner.
- The calculator uses a simple extra loan repayment formula embedded in the system to calculate the amount. The formula used is:
E = P * r * (1+r)^n / ((1+r)^n-1)
E is EMI,
P is the principal loan amount,
r is the rate of interest calculated every month.
- Almost every NBFC (Non-Banking Financial Company) or bank has an online extra loan repayment calculator which you can use before or after applying for a home loan.
- You must provide the loan amount, interest rate, and repayment tenure in the respective fields to find the exact monthly repayment amount you must pay.
- The loan repayment calculator extra payments don’t require professional and personal details.
- Usually, the extra repayment mortgage calculator uses the fixed interest rate to calculate the values. But some calculators, such as Urban Money Oceania’s extra loan repayment calculator, etc., allow you to enter different values of interest rates so that you can compare loans of different banks.
- The values that you receive after calculation can be used to set a repayment pattern. It segregates the EMI between the rate of interest on the home loan and the principal amount.
- Some loan repayment calculators are more comprehensive. They consider various factors like insurance, local state tax, and ongoing loan EMI.
- Such calculators provide insight into what home loan package you must choose.
- You can pay any extra amount you want on the home loan.
What is the Formula for Home Loan Extra Repayment Calculation?
You can calculate the extra monthly loan repayment amount on your home loan using the following formula:
Monthly Loan Repayment Amount = [P x R x (1+R) ^N]/[(1+R) ^N-1],
where P, R, and N are variables.
- P is the ‘Principal Amount’.
- R defines the ‘Rate of Interest’ fixed by the bank. Interest rates differ for every bank.
- N is the ‘Number of Years you have obtained the loan. Since we pay EMIs monthly, N is represented in months.
Factors Affecting the Home Loan Extra Repayment
The extra loan repayment and loan repayment amount depend on various factors. Some of the factors impacting the amount are as follows:
It is one of the factors that get the most attention from homebuyers. Interest rates are vital in determining how much you will have to pay. With lower interest rates, the loan repayment amount also reduces. However, if there’s a minor change in the interest rate, it will create a huge difference.
Therefore, make extra loan payments to pay off your loan quickly and save interest.
Fixed rates home loans are locked in for 1 to 5 years. This prevents your loan from attracting any higher interest rates that may increase. Moreover, it will aid you in planning finances better as you will be aware of the amount you will have to repay. When the locked-in period is over, you can start paying extra loan amounts to pay off debt as soon as possible.
As the name suggests, the interest rate on a loan is not fixed. The loan rates go up and down depending on the market conditions. This includes factors such as changes in the cash rate and other alterations made by the lender.
The significance of availing of variable rates is that they often go down if the cash rate is cut, which decreases the interest rate you will have to pay on a loan. Usually, there are no constraints on making additional repayments. Therefore, if you want to clear your debts earlier, it will be good for you only.
LVR (loan-to-value) ratio plays a very significant role in loan repayments. It may influence the interest rate on the home loan. The loan-to-value ratio is determined by dividing your home loan amount by the home's appraised value or purchase price.
If your LVR ratio is higher, the lender will assume you to be at a greater risk. Therefore, they may impose a higher interest rate on the loans with an LVR above 80%. Thus, it is crucial to determine your LVR before you approach banks and take strict measures to work to reduce it.
Also referred to as a split loan, partially-fixed rate loans allow you to pay a fixed rate on a specific part of your loan while a variable rate is applied to the rest of your loan. For instance, if you obtained a home loan of $520,000, you may pay a fixed rate of $320,000 and a variable rate on the remaining $200,000.
Partially-fixed rate loans are suitable for borrowers seeking the security of regular payments on some portion of their loan. Still, they also want to avail of the benefits of interest rate drops on the rest of their loan. The lenders don’t limit additional repayments on the variable part of the borrower’s loan.
Offset and Extra Repayment Calculator
With a 100% offset account, you can repay your loan sooner by lowering your payment on interest.
The offset account works by applying just the interest on the balance of your home loan, less the balance of your offset account.
The home loan calculator extra repayments and offset allows you to evaluate the interest you can save based on the amount available in your offset account.
The more money you have in your offset account, the more you can save on monthly interest. Hence, always keep some balance in your offset account to avail the most benefits.
Lump Sum and Extra Repayment Calculator
Such a calculator allows you to determine the amount you can save by paying extra on your existing home loan or a one-off lump sum.
By making extra payments, you can reduce your loan term by one or two years and save quite an excellent amount on the interest.
Typically, the average home loan tenure ranges from 25 to 30 years.
Moreover, it is a long time to keep paying and incurring interest. Hence, it is recommended to reduce the term of your home loan and save money by making an or-time lump sum or extra repayment.
Frequently Asked Questions
How much can I save with extra home loan repayments?
You can pay hefty. With extra loan repayments, you can reduce the interest applied on the loan amount. Plus, you will be able to repay your loan faster.
Can you make extra repayments on a fixed loan?
Fixed term usually ranges from 1 to 5 years, so you are not stuck. Hence, when the lock-in period ends, you can make extra repayments without paying any penalty over the same.
Can I cut my loan term in half?
If you have the required loan repayment fund, you can cut your loan tenure in half.
Can I access it if I make extra repayments and need the money later?
Some banks offer the facility to make extra repayments and withdraw them later in case of unexpected bills, renovations, etc. Before availing of the loan, you may have to look into the lender’s terms and conditions.
How quickly can I pay off my mortgage by making additional repayments?
This entirely depends on how large is your extra repayment. The larger it will be, the quicker you can repay your loan with extra repayments.
What if my lender has extra repayment penalties?
In such a case, you can still repay your loans faster if you have sufficient funds. Even with the penalties, you will pay less for your loan than the chosen tenure.