Lump Sum Repayment Calculator
Find out what difference a lump sum deposit will make to your home loan and how much your repayments will reduce over the long-term.
Make Your Money Work Harder
Have you recently come into some extra cash? Whether it’s an inheritance, a bonus, or simply disciplined savings, putting a “lump sum” toward your home loan can have a massive impact on your financial future.
Our Lump Sum Repayment Calculator helps you visualise the long-term benefits of a one-off extra payment. It’s a simple way to see how much interest you could save and how much sooner you’ll own your home outright.
The Power of Early Extra Repayments
The secret to the lump sum strategy is time. Because interest is calculated daily on your remaining balance, reducing that balance early in the life of the loan prevents interest from compounding.
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Small Amount, Big Impact: Even a $5,000 payment made early in a 30-year loan can save you tens of thousands of dollars over the life of the mortgage.
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Flexibility: Unlike increasing your regular repayments, a lump sum is a one-time commitment that offers immediate and permanent benefits.
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Build Equity Faster: By lowering your principal balance, you increase the equity in your home, which can be useful if you plan to renovate or invest in the future.
Frequently Asked Questions (Lump Sum Repayment Calculator)
Q. Is there a limit to how much I can pay in a lump sum?
A. This depends on your specific loan product. Most variable-rate loans allow unlimited extra repayments. However, if you are on a fixed-rate loan, there may be an annual cap on extra repayments (e.g., $10,000 or $20,000 per year) before “break costs” apply.
Q. Does a lump sum reduce my monthly repayments?
A. Typically, no. A lump sum reduces your total loan balance and the time it takes to pay it off, but your required monthly repayment usually stays the same unless you specifically ask your lender to “recast” or restructure the loan.
Q. Should I put the money in my mortgage or an offset account?
A. A lump sum payment directly into the loan reduces the balance permanently. Putting the money into an offset account provides the same interest-saving benefit, but allows you to withdraw the cash if you need it later. We recommend speaking to a Westgate broker to see which path suits you best.
Get a Personalised Mortgage Health Check
Every dollar counts, but the right loan structure counts for even more. If you’re looking to optimise your repayments or want to see if there’s a more competitive rate available in the WA market, the team at Westgate Home Loans is here to help.
