Repayments
Repayments
Principal and interest against interest only on the same loan, and what each one does to the balance still owing at the end.
The tool sits here.
Darren Parker, Credit Representative 501592, authorised under Australian Credit Licence 389328. This is general information, not credit assistance.
What does a repayment calculator actually tell you?
A repayment calculator turns three figures — a loan amount, an interest rate and a term — into a monthly payment. That is arithmetic, not a lending decision. The rate a lender will actually charge depends on the deposit, the loan purpose and the borrower's own file, so the figure you type in matters more than the tool does.
Why does interest only look cheaper than principal and interest?
Interest only lowers the monthly payment because none of the payment reduces the debt. When the interest-only period ends the balance is what it was on day one, and fewer years remain to clear it, so the payment afterwards is higher than principal and interest would have been throughout.
What the tool will ask you for
The amount you are borrowing Not the purchase price. The loan is the price less your deposit, and any duty you add to the loan sits on top.
The interest rate The rate on the loan, not the comparison rate. A comparison rate bundles fees and answers a different question.
The years still to run Not a fresh thirty. A loan eight years in has twenty-two years left, and comparing it against thirty flatters the new loan.
Principal and interest, or interest only And if interest only, how many years of it before the loan reverts.
How often you pay Weekly, fortnightly and monthly do not divide evenly into one another, and over a full year the difference is real.
When is the answer to leave the loan alone?
When the loan has few years left to run, a lower rate has little left to work on and the cost of moving can outrun the gain. The same is true where a fixed rate carries a break cost, or where switching would restart a term that is nearly finished.
Send the loan you have now and get the comparison run properly
Send the balance, the rate and the years left on your current loan. Money Brain runs principal and interest against interest only on your real numbers and says where the cheaper monthly payment costs more over the term.
Checked and updated 30 August 2026