If you have experienced a change in your financial circumstances, resulting in more available funds to contribute toward your mortgage, you could benefit from making extra repayments. Find out how much time and money you could save when repaying above your minimum with our extra mortgage repayment calculator.
Entry Conveyancing’s extra repayment calculator tool allows you to see the potential savings you could make by making extra repayments on your mortgage. All you need to do is enter these details into the relevant fields:
- loan details
- repayment amount
- frequency
Then, our extra repayment calculator will instantly provide you with an accurate estimate of the amount of interest and time you could save by making additional payments toward your home loan.
Whether you’re looking to pay off your mortgage sooner or reduce the amount of interest you pay over the total life of your loan, our repayment calculator can help you make an informed decision about your mortgage repayments — showing you how much you could save!
What type of loan can I make extra repayments on?
Generally, the two types of home loans you will be permitted to make extra repayments on are:
- Variable rate loans
- Interest-only loans
Fixed Rate loans typically do not allow for extra repayments to be made. Even if they do, there may be strict limitations on the amount that can be made.
Therefore, it’s essential to check your loan policy to understand the limits and requirements for making extra repayments on your loan.
Should I make extra repayments monthly or as a lump sum?
Whether you should make extra repayments on your home loan monthly or as a lump sum depends on your financial situation and goals. Both approaches have their advantages:
Monthly extra repayments:
- making extra repayments monthly allows you to establish a regular habit of reducing your loan principal.
- smaller, regular payments may be more manageable within your monthly budget.
- reducing your principal balance monthly can lead to slightly more interest savings over time compared to an equivalent lump sum payment.
Lump sum extra repayments:
- Making a lump sum payment, such as a tax refund or bonus, can lead to significant immediate interest savings, as it reduces the principal balance instantly.
- Lump sum payments are well-suited for windfalls or large one-time cash infusions.
- If your goal is to pay off your loan faster, a lump sum payment may have a more immediate impact.
Will making extra repayments increase my credit score?
No, making extra repayments on your home loan will not have a direct impact on your credit score.
However, successfully repaying your loan will increase your credit score, and making extra repayments can help you do so sooner while reaping savings on interest.