Testing a mortgage budget at different interest rates
Compare repayment and total-interest scenarios without treating today’s input as a forecast.
A mortgage calculator is most useful when you run more than one scenario. One repayment figure can hide how dependent the budget is on an assumed interest rate or term.
Hold the loan and term constant
The following examples all use a $600,000 principal and a 30-year term. The rates are illustrative inputs, not current offers. Each row assumes its rate remains unchanged for the whole term.
| Assumed annual rate | Monthly repayment | Total modelled interest |
|---|---|---|
| 5% | $3,220.93 | $559,534.71 |
| 6% | $3,597.30 | $695,029.13 |
| 7% | $3,991.81 | $837,053.39 |
Read the monthly and lifetime figures together
The monthly amount describes the regular payment in this fixed-rate model. Total interest adds up the cost over the entire assumed term. It is particularly sensitive to the assumption that the rate never changes. Do not interpret that lifetime number as a forecast for a loan that will be refixed several times.
Now change the term, not the rate
At 6%, compare 25 years with 30 years. The shorter term has a larger monthly payment because the principal must be repaid sooner. It also produces less modelled total interest. Neither result by itself establishes which term fits your circumstances.
| Term at 6% | Monthly payment | Total interest |
|---|---|---|
| 25 years | $3,865.81 | $559,742.52 |
| 30 years | $3,597.30 | $695,029.13 |
Add the costs outside the model
Property rates, insurance, maintenance and fees can be substantial parts of a budget. Keep them beside the loan repayment rather than assuming they are included. Check the timing of payments too: this tool uses monthly instalments and does not model a lender’s daily-interest method or a fortnightly repayment arrangement.
Use the result as a question to investigate
If a higher-rate scenario consumes your buffer, identify the trade-offs before committing to an offer. A lender’s affordability assessment includes information this calculator does not collect. The tool provides arithmetic for a chosen set of assumptions; it neither approves borrowing nor recommends a loan product.
Test your own loan scenario · Read the repayment formula and limitations
Questions or corrections?
Send the relevant page and a non-sensitive example through our contact form. Read our calculation methodology to see the scope of the model.