Property & Home Loans
Lump Sum Payment Calculator
Find out how much interest you save and how much sooner your mortgage ends when you make a one-off lump sum payment.
The one-off extra payment you plan to make
How many years into the loan you plan to make the lump sum payment
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FAQ
Frequently asked questions
When is the best time to make a lump sum mortgage payment?
Earlier is always better. A lump sum payment made in year 1 saves significantly more interest than the same payment made in year 10, because there are more years of compounding for the interest to accumulate. However, any lump sum payment is beneficial at any point in the loan.
Does a lump sum payment reduce my repayments or shorten my loan?
It depends on your lender. Most lenders keep your repayment the same but your loan ends earlier. Some allow you to revert to a lower minimum repayment — but keeping repayments the same maximises your interest savings.
What is the best use of a windfall — lump sum on the mortgage or investing?
This depends on your mortgage rate vs expected investment return, and your risk tolerance. If your mortgage rate is 6.5%, you need investments to return more than 6.5% after tax to come out ahead. For most Australians paying down the mortgage is a guaranteed, risk-free return.
Are there fees for making lump sum payments on a fixed rate loan?
Fixed rate loans often include break costs or limit extra repayments during the fixed period. On variable rate loans, lump sum payments are generally unlimited and fee-free. Always check your loan contract.
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