How an Australian extra-repayment calculator works

Construct the baseline before adding extras

Take current principal, contract rate, remaining term, next payment date and regular principal-and-interest amount. Accrue interest across the calendar days between repayments, then apply each scheduled payment under a consistent convention.

If the estimated balance diverges from the statement, inspect payment date, lender day count, interest charging date, fees, offset and rounding. Do not hide the difference by changing inputs without evidence.

Keep offset and principal as separate states

An eligible offset reduces the interest-bearing balance but leaves contract principal unchanged. A direct extra repayment reduces principal. Redraw is potential access to prior extra repayments and should not be represented as a separate offset deposit.

The plan schedule applies a lump sum and recurring extra on stated dates, then compares interest and payoff with the baseline. A quoted break cost can be deducted from gross savings as a simple fee, but the engine does not calculate that cost.

Method audit checklist

1. Use current balance and actual next payment date.
2. Disclose the 365- and 366-day convention.
3. Date monthly, fortnightly and weekly payments correctly.
4. Cap the interest benefit when offset exceeds principal.
5. Keep rates constant only with a clear warning.
6. Show assumptions, fees and final-payment rounding.

What the model cannot decide

It cannot identify a fixed-loan allowance, predict rates, value liquidity, determine tax treatment or reproduce a lender’s break-cost calculation. Moneysmart likewise discloses calculator assumptions and notes that institutions may calculate repayments differently.

• Do not promise an exact interest saving.
• Do not combine materially different loan splits blindly.
• Use lender figures for payout and contractual fees.
• Rerun after rate, balance or product changes.
• Keep a zero-extra case visible.

Use a calculator as a scenario, not a promise

Payoff Atlas uses actual calendar spacing and exposes the resulting assumptions and warnings. Its purpose is reproducible scenario comparison, not matching every lender to the cent.

The Australian model accrues interest across the actual calendar days between repayments, using 365 days or 366 in a leap year. It supports monthly, fortnightly and weekly schedules and keeps offset separate from contract principal.

The estimate holds the entered rate constant, assumes extras reach principal and does not model redraw as offset. Lender posting, fixed limits, break costs, fees and split-loan details can produce a different result.

Review the plan before money leaves

Compare zero extra, the intended plan and a version that pauses after a household shock. Use the same starting balance, dates and rate in each run. For a variable or split loan, repeat the comparison at other rates without describing any case as a forecast.

Keep the loan contract, current statement and written lender answers about fixed limits, break costs, offset links and redraw. Model materially different splits separately, because one blended schedule can hide different expiry dates and features.

• Fund required repayments and essential bills before voluntary extras.
• Keep an accessible reserve for income shocks and home repairs.
• Verify which split receives the extra repayment.
• Check the statement after the first transaction or frequency change.
• Rerun after a rate, repayment, offset, fee or product change.