What is the RBA cash rate and how does it affect my mortgage?

The RBA sets the cash rate which directly influences variable mortgage rates. Standard variable rates are typically 1.5-2.5% above the cash rate.

How much deposit do I need to buy a house in Australia?

As little as 5% with LMI, or 20% to avoid LMI. First Home Guarantee allows 5% deposit with no LMI for eligible buyers.

Should I choose P&I or interest-only repayments?

P&I is better for owner-occupiers — builds equity and saves on total interest. IO is popular with investors for cash flow and tax purposes.

What are offset accounts and redraw facilities?

An offset account balance reduces your loan balance for interest calculation. Redraw lets you access extra repayments you've made.

Australian Mortgage Calculator

Calculate your home loan repayments for principal & interest or interest-only loans. Includes LMI estimate, council rates, and strata fees. All figures in AUD.

Property Value

Deposit

$20%

Interest Rate

% p.a.

Loan Term

Repayment Type

Monthly Repayment

A$4,195

A$3,920 principal & interest

Principal & Interest: $3,920

Council Rates: $150

Insurance: $125

Loan Amount

A$640,000

Total Interest

A$771,129

LVR

80.0%

Total Repaid

A$1,411,129

How to Use This Australian Mortgage Calculator

Enter your Property Value and Deposit to see your estimated monthly repayment. Choose between Principal & Interest (P&I) or Interest Only (IO). The calculator estimates Lender's Mortgage Insurance (LMI) if your deposit is under 20% (LVR above 80%) and includes it in the loan amount.

Use "More options" to add council rates, strata fees (for apartments/units), and home insurance for a complete monthly cost picture.

The Formula

P&I Monthly Repayment = L × [r(1+r)^n] / [(1+r)^n - 1]

Where:
L = Loan amount (including LMI if applicable)
r = Monthly interest rate (annual rate ÷ 12)
n = Total months (years × 12)

Interest Only = Loan Amount × Annual Rate / 12

LMI Estimate (LVR 80–85%): ~1% of loan
LMI Estimate (LVR 85–90%): ~2% of loan
LMI Estimate (LVR 90–95%): ~3.5% of loan

Example: Buying in Sydney, NSW

Tom and Emma's First Home

Purchasing a 2-bedroom apartment in Parramatta, Western Sydney.

Property Value	$850,000
Deposit (20%)	$170,000
Loan Amount	$680,000
Rate (6.20%, 30 years P&I)	$4,163/mo
Council Rates	$150/mo
Strata Fees	$600/mo
Insurance (landlord/home)	$125/mo
Total Monthly Cost	$5,038
Total Interest (30 yrs)	$817,600

If they had only a 15% deposit ($127,500), LMI would add ~$14,960 to the loan, increasing the monthly repayment by ~$92.

Frequently Asked Questions

The Reserve Bank of Australia (RBA) sets the cash rate, which directly influences variable mortgage rates. When the RBA raises rates, lenders typically pass the increase on within days. Fixed-rate mortgages are unaffected during the fixed period. Australia's standard variable rate is typically 1.5–2.5% above the cash rate.

Technically as little as 5% with LMI. To avoid LMI, you need 20%. First home buyers can access the First Home Guarantee (5% deposit with no LMI, government backing), and the Family Home Guarantee (2% for single parents). Some lenders accept genuine savings of at least 5% of the purchase price.

P&I is almost always better for owner-occupiers — you build equity and save significantly on total interest. Interest-only (IO) is popular with investors for cash flow and tax deduction purposes during the IO period. IO rates are typically 0.2–0.5% higher than P&I rates, and most lenders limit IO periods to 5 years (up to 10 for investment loans).

An offset account is a transaction account linked to your mortgage. The balance in the offset reduces the loan balance for interest calculation. $50,000 in offset on a $500,000 loan means you only pay interest on $450,000. A redraw facility lets you access extra repayments you've made — less tax-effective for investors but useful for owner-occupiers.