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Owning your home can be one of the most exciting milestones of your life, it is usually one of the most expensive milestones as well. However, paying your mortgage at the standard rate over the standard life of the loan can be costly. We take a look at how this works below:
Most of us want to own our own home, yet once we get the keys we also get the debt. It is understandable to want to get on top of your home loan as quickly as you can.
A thirty-year loan doesn’t mean you need to take thirty years to pay it off.
Planning to pay off your mortgage as soon as possible is a smart move. The total interest paid on a loan over 30 years can be excessively high. We demonstrate this below:
See our case study example:
Cathy and Tom are looking to upsize on their current home. They purchase an existing dwelling for $650,000 and use $150,000 from the sale of their home for the deposit. The total amount for their mortgage is $500,000 which they choose to pay off monthly over 30 years in a variable interest rate loan.
Mortgage detail summary:
Interest 5.75% variable
Term 30 years
The monthly repayments they make on this loan are approximately $2912.
The total amount of interest paid over the 30 year period assuming they do not change their interest rate or repayment amount or frequencing is a whopping $548,145.31.
That means for an initial mortgage of $500,000 you would end up paying a total of $1,048,145.31 over the 30 years.
- This calculator is provided by Infochoice.
- The results shown in this calculator are estimates only and are not guaranteed by AMP Bank. They are based on the accuracy of the data entered into the calculator.
- Other than as required by consumer protection law, under no circumstances will AMP Bank and its related bodies corporate be liable for any loss and/or damage caused by a user’s reliance on information obtained by using this calculator.
- AMP Bank and its related bodies corporate specifically disclaim any liability (whether based in contract, tort, strict liability or otherwise) for any direct, indirect, incidental, consequential or special loss and/or damages arising out of or in any way connected with the access to or use of this calculator.
- Any change to the factors used in the calculation would vary the results.
- The calculator and the results provided are generic and do not take into account your personal circumstances. The calculator is a guide only and is not intended to be relied upon for the purposes of making a decision in relation to a credit or financial product. The user should obtain professional financial advice before making any financial decision.
- Any advice given is general advice only and has been prepared without taking account of your objectives, financial situation or needs. Given this, before acting on the advice, you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs before acting on it. Consider the applicable Terms and Conditions before deciding whether to acquire or continue to hold an AMP Bank product.
- The calculator is not an offer for a loan. To apply for an AMP Bank home loan, you must complete an application form and submit it together with all required documentation for assessment. Formal loan approval is subject to AMP Bank lending criteria. All information entered into the calculator will require verification as part of our application process.
- When taking out an AMP Bank loan, certain fees and charges are payable by the borrower. These include but are not limited to Government stamp duty and registration costs, AMP Bank’s Establishment Fee, Lender’s Mortgage Insurance and other fees and charges.
- Fees and charges are payable. Terms and Conditions apply to AMP Bank products and are available upon request.
- The credit provider and product issuer is AMP Bank Limited ABN 15 081 596 009, Australian credit licence 234517, AFSL 234517.
This website contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.