How it works
Monthly payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where r is the monthly rate and n is the number of payments.
A worked example
Borrowing 240,000 over 25 years at 4.5% gives a monthly repayment of about 1,334.00.
What to keep in mind
Fixed nominal annual interest divided by 12, monthly repayments in arrears. Excludes fees, taxes, insurance and rate changes. Not a lender quote.
A common question
What happens at a 0% rate?
The loan is divided equally across all monthly payments. No interest is added.
For general information and planning, not personalised financial or tax advice. Verify important decisions with a qualified adviser.