Home Loan Comparison Calculator

How it Works

The Home Loan Comparison Calculator compares two loans and determines which is the cheapest in total fees and interest.

The Home Loan Comparison Calculator calculates the total amounts payable under two alternative loans and then provides the comparative amount saved by using the lower cost loan. The two loans allow for the entry of different expense amounts, both initial and ongoing (either monthly, fortnightly or weekly frequency as entered). In addition, the two loans allow for the entry of different introductory interest rates and terms, with different ongoing interest rates for the balance of the loan term. The calculation is done based on a monthly repayment frequency, in respect of the common loan parameters entered, namely amount and total term in years.

Calculator Assumptions

Length of Month

All months are assumed to be of equal length. In reality, many loans accrue on a daily basis leading to a varying number of days’ interest dependent on the number of days in the particular month.

Number of Weeks/Fortnights in a Year

One year is assumed to contain exactly 52 weeks or 26 fortnights. This implicitly assumes that a year has 364 days rather than the actual 365 or 366.

Rounding of Amount of Each Repayment

In practice, repayments are rounded to at least the nearer cent. However the calculator uses the unrounded repayment to derive the amount of interest payable at points along the graph and in total over the full term of the loan. This assumption allows for a smooth graph and equal repayment amounts. Note that the final repayment after the increase in repayment amount will be a partial repayment as required to reduce the loan balance to zero.

Amounts of Totals Payable under each Loan

The website calculator quotes Total Amounts Payable under each loan that are rounded to the nearer dollar, after basing the calculations on unrounded repayment amounts.

Amount of Saving under Lower Cost Loan

The calculation of the amount of repayments saved under the lower cost loan is based on unrounded payment amounts. The amount saved is quoted in dollars and cents, not rounded to the nearer dollar.