How much is your loan
really costing you?

It depends on your balance, your interest rate, and how many years are left. A typical Australian home loan of $500,000 at 6.2% p.a. with 25 years remaining will cost roughly $480,000 in interest over the life of the loan — nearly as much as the principal itself. Personal loans and credit cards run higher; many Australians paying 18% to 22% on credit card balances pay more in interest each year than they pay down on principal. This calculator shows your total interest for your specific inputs and the savings you could unlock by paying extra or refinancing.

Every extra dollar you put on the loan today reduces the balance the next month's interest is charged on. On a $500,000 mortgage at 6.2%, an extra $200 per month saves about $97,000 in interest and shaves roughly 4 years off the term. The earlier in the loan you make extra repayments, the more they save — because there's more interest yet to be charged. Note that most Australian fixed-rate loans cap extra repayments at $10,000 to $20,000 per year before incurring break costs.

It depends on your interest rate vs your expected after-tax investment return. With variable owner-occupier rates around 6.0% to 6.5% in 2026 and the ASX long-run nominal return near 9%, investing has historically beaten extra mortgage repayments — but mortgage paydown is a guaranteed risk-free after-tax return, while investing has volatility and tax consequences (CGT on sale, no franking credits inside an offset account). Many Australians split the difference: salary sacrifice the tax-advantaged portion into super, keep an emergency fund liquid, and direct any surplus into an offset account or extra repayments.

The interest rate is the percentage charged on your outstanding balance. The comparison rate combines that with most upfront and ongoing fees, expressed as a single percentage calculated on a standard $150,000 loan over 25 years. A loan with a low headline rate and high fees can have a comparison rate close to a competitor's headline rate — the comparison rate is the truer cost. When this calculator shows you total interest, it uses the interest rate only; remember to factor in fees separately when comparing products.

Run the numbers. A 0.5% rate cut on a $500,000 mortgage at 6.2% saves roughly $50,000 in interest over 25 years, but you typically pay $300 to $600 in discharge fees plus $300 to $500 in establishment fees, and may face a few months of mortgage processing while you switch. The Richify Refinance Calculator computes the break-even months — usually 6 to 18 months for an owner-occupier — after which the rate saving is pure benefit. Cashback offers and clawback windows are common in 2026; read the fine print.

An offset account is a transaction account linked to your mortgage. Each day, the offset balance is subtracted from your outstanding loan before interest is calculated. If you owe $500,000 and keep $50,000 in offset, interest is charged on $450,000 — saving roughly $3,100 per year at 6.2%. Offset accounts also let you withdraw the money any time, unlike extra repayments to redraw (some lenders restrict redraw or charge fees). For most Australian owner-occupiers, an offset account is the single highest-leverage interest-saving tool available.

As of early 2026, variable owner-occupier rates from the major banks sit around 6.0% to 6.5% p.a. for standard products. Competitive fixed rates for two- and three-year terms range from approximately 5.5% to 6.2%. Investor and interest-only loans carry an APRA-mandated premium of 0.4% to 0.7%. Always compare the comparison rate, not the headline rate, since fees vary widely across lenders.

If your monthly repayment is less than the monthly interest charge, the balance grows faster than you can pay it down — the loan never clears. This is the trap that catches many credit card minimum-payment users: a $10,000 balance at 22% APR with the typical 2.5% minimum repayment can take 25+ years to clear. To break free, you need to pay more than the monthly interest plus a meaningful principal contribution. Run the scenarios — small extra repayments often shave years off.

No, the figures shown are in nominal dollars (today's purchasing power, not adjusted for future inflation). Australian inflation has averaged around 3% to 3.5% per year recently, so a $480,000 interest bill paid over 25 years will feel smaller in real terms when paid in later years. For a real-return view, mentally lower the total by your inflation assumption. This doesn't change the relative comparison between scenarios.

Yes — Richify is available to download in Australia on the App Store and Google Play, and it is free to start. The app tracks your loans alongside super, ASX shares, and property, so you can see exactly how every extra dollar of repayment moves your net worth. Felix and the specialist AI agents are built for Australians, with HECS, super, and CGT logic baked in.