Mortgage repayment calculator
Estimate your monthly repayments, total interest paid, and see a full amortisation breakdown. Adjust the sliders or type values to explore scenarios.
How to use the RatePal mortgage calculator
Our free mortgage calculator helps you estimate monthly repayments, total interest costs and the full amortisation schedule for any New Zealand home loan. Whether you're a first-home buyer working out your budget or a homeowner considering refinancing, follow the four simple steps below to model different scenarios in seconds.
Step-by-step instructions
Enter Your Property Value
Use the Property value slider or type the purchase price of the home you're buying (or the current value if you're refinancing). The calculator accepts values from $50,000 up to $3,000,000 — covering everything from a first apartment to a larger family home in New Zealand.
Set Your Deposit
Adjust the Deposit slider to reflect how much you've saved. The percentage updates automatically so you can see your loan-to-value ratio (LVR). A 20% deposit is the standard threshold in NZ to avoid low-equity margins, but you can model any amount. To understand how your deposit affects the rates available to you, visit our mortgage rate comparison page.
Choose an Interest Rate
Enter the annual Interest rate you expect to pay. If you're unsure, check our live NZ mortgage rates for current averages. The slider ranges from 0.50% to 15.00%, letting you stress-test your budget against rate rises. Not sure whether to go fixed or floating? Our guide on fixed vs floating mortgage rates explains the trade-offs.
Select Your Loan Term
Set the Loan term — typically 25 or 30 years in New Zealand. A shorter term means higher monthly repayments but dramatically less interest over the life of the loan (see our example calculations below). Use the Repayment Planner to model year-by-year payoff strategies.
Tip — reading your results
Once you've set all four inputs, the calculator instantly displays your estimated monthly repayment, the total interest you'd pay over the full term, and a breakdown of principal vs interest as a visual donut chart. Expand the amortisation schedule at the bottom to see how your balance decreases year by year. If you want to explore ways to reduce your total interest cost, try our Mortgage Optimizer.
Input fields explained
- Property Value
- The total purchase price (or current market value if refinancing). This is the starting point for calculating your loan amount after deducting your deposit.
- Deposit
- The cash contribution you bring to the purchase. In New Zealand, most banks require at least 20% for standard lending and 10% for first-home buyers with a Kāinga Ora first-home loan. Your deposit determines your LVR, which directly affects the interest rates available to you.
- Interest Rate (Annual)
- The yearly interest rate charged by your lender, expressed as a percentage. This is applied monthly in the repayment calculation. Rates vary depending on your LVR, the fixed-rate term you choose, and the lender. Check current NZ rates for the latest figures.
- Loan Term
- The total number of years over which you'll repay the mortgage. Standard terms in NZ range from 15 to 30 years. A shorter term increases your monthly repayment but significantly reduces total interest. Not sure what you can afford? Our how much can I borrow guide walks you through affordability.
Understanding your mortgage repayments
Knowing how your repayments are calculated helps you make smarter borrowing decisions. Below we break down the maths in plain language so you can understand exactly where your money goes each month.
How repayments are calculated
New Zealand home loans use a standard table mortgage structure (also called a reducing or annuity mortgage). Your monthly repayment stays the same for each fixed-rate period, but the split between principal and interest shifts over time.
The calculation uses the PMT (Payment) formula. In plain terms: the calculator takes your loan amount, divides the annual interest rate by 12 to get a monthly rate, then works out the fixed monthly payment that will fully repay the loan — principal plus interest — over the total number of months in your term.
For example, on a $500,000 loan at 6.00% over 30 years, the monthly rate is 0.50% (6.00% ÷ 12). The formula balances a payment amount so that after 360 monthly payments (30 × 12), the remaining balance reaches exactly zero.
Tip — the PMT formula
The exact formula is: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ – 1], where M is the monthly payment, P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). You don't need to remember this — our calculator does it for you instantly.
Principal vs interest — Which am I paying?
Every mortgage repayment has two components. The principal portion reduces your actual loan balance — this is the part that builds your equity in the property. The interest portion is the cost of borrowing — it goes to the lender.
Principal
The amount that reduces your outstanding loan balance. In the early years, only a small portion of each payment goes toward principal. As the balance shrinks, the principal share increases. This is what builds your home equity over time.
Interest
The cost your lender charges for the use of their money. Interest is calculated on your remaining balance, so it's highest at the start of your mortgage and decreases over time. On a 30-year loan, you may pay more in interest than the original loan amount.
You can see this shift clearly in the amortisation schedule below our calculator — watch how the interest portion drops and the principal portion grows each year.
How loan term affects your total interest
The length of your mortgage has a dramatic impact on the total interest you pay — often more than the interest rate itself. A longer term means lower monthly payments, which can feel more comfortable month to month, but the trade-off is significant.
Consider a $500,000 loan at 6.00%: over 30 years you'd pay approximately $579,191 in total interest. Cut the term to 25 years and the total interest drops to around $466,771 — a saving of over $112,000 — even though the monthly payment rises by roughly $350. That's an extra five years of payments eliminated and a six-figure saving in interest. Use the Repayment Planner to see exactly how extra payments or a shorter term can accelerate your payoff.
Tip — small extra payments add up
Even an extra $50 or $100 per month toward your mortgage can shave years off the term and save tens of thousands in interest. Our Mortgage Optimizer shows you exactly how much different strategies — offset accounts, revolving credit, or simply increasing repayments — can save you over the life of your loan.
Example calculations
Below are three worked examples to illustrate how the loan amount, term and interest rate interact. All figures assume standard table (principal-and-interest) repayments with no extra payments.
30-year mortgage example
A $500,000 loan is close to the median borrowing amount for New Zealand homebuyers. At a rate of 5.99% (near the current average for a 1-year fixed rate with an LVR under 80%), here's what the numbers look like over 30 years:
$2,995
Your fixed monthly payment for 360 months.
$578,164
The total cost of borrowing over 30 years — more than the original loan.
Over 30 years at this rate, you'd repay a total of $1,078,164 — the original $500,000 principal plus $578,164 in interest. The donut chart in our calculator will show that interest makes up about 54% of your total payments.
25-year mortgage example
Now let's shorten the term by just five years, keeping everything else the same ($500,000 at 5.99%):
$3,221
$226 more per month than the 30-year option.
$466,155
$112,009 less than the 30-year term.
By paying $226 extra per month, you eliminate five years of repayments and save over $112,000 in interest. That's one of the most powerful financial moves available to NZ homeowners. Wondering whether you can afford the higher payment? Our how much can I borrow guide helps you work out your comfortable limit.
Rate difference example
Half a percent might not sound like much, but on a large loan over a long term, it compounds into a significant amount. Here's the same $500,000 loan over 30 years at two rates:
$2,835 / month
Total interest: $520,505
$2,995 / month
Total interest: $578,164
The difference? $57,659 in total interest and $160 per month — just from a 0.5% rate gap. This is exactly why it pays to compare mortgage rates across NZ lenders rather than accepting the first offer. Even small rate differences compound into five-figure savings over the life of your loan.
Tip — negotiate or shop around
NZ banks have discretion to offer "special" or "negotiated" rates that are lower than the advertised carded rate. If you have a strong LVR (under 80%) and stable income, it's always worth asking. Use our rate comparison table to know what other lenders are offering before you negotiate with your current bank. You can also explore whether an offset or revolving credit structure could reduce your effective rate further.
Frequently asked questions
How accurate is the RatePal mortgage calculator?
Our calculator uses the same standard PMT formula that New Zealand banks use for table mortgages (principal and interest). The monthly repayment figure will match what a bank would quote for the same inputs. However, actual offers may vary slightly due to fees, specific rate structures (e.g. offset or revolving portions) and whether you qualify for a lender's advertised rates based on your LVR and credit profile.
What interest rate should I use in the calculator?
For the most realistic estimate, check our live NZ mortgage rate comparison and use a rate that matches your deposit level and preferred fixed-rate term. If you're planning ahead, try stress-testing with a rate 1–2% higher than current averages to make sure you can handle potential increases. Our guide on fixed vs floating rates can help you decide which type suits your situation.
What is the difference between a 25-year and 30-year mortgage?
A 25-year term typically has monthly repayments that are 7–10% higher than a 30-year term, but you save substantially on total interest — often $100,000 or more on a $500,000 loan. You also own your home outright five years sooner. If you can comfortably afford the higher repayment, a shorter term is almost always better financially. Use the Repayment Planner to compare both options side by side.
How much can I borrow for a mortgage in New Zealand?
Most NZ banks will lend up to 6 times your annual household income, provided you meet their serviceability tests (which typically stress your ability to repay at rates 2–3% above the current rate). Your deposit size and existing debts also matter. Our how much can I borrow guide explains the key factors and how to maximise your borrowing power.
Can I reduce my total interest without refinancing?
Yes — there are several strategies. Making extra repayments (even small ones) directly reduces your principal, which lowers the interest charged each subsequent month. You can also explore offset accounts or revolving credit structures that let your savings reduce the balance that interest is calculated on. Even switching from fortnightly to weekly payments results in slightly faster principal reduction due to the extra payment cycle each year.