New Zealand
Mortgage calculator
Buying a home and want to know the monthly commitment? This estimates the repayment on a capital-and-interest mortgage along with the interest you will pay across the whole term. Enter the amount you are borrowing (the price minus your deposit), the interest rate, and the term in years. It returns the monthly payment and the lifetime interest. Because the underlying maths does not care about currency, picking your country only sets the formatting. Use it to sanity-check a quote or compare a 25-year term against 30.
How it works
- A repayment mortgage clears itself through equal monthly instalments, so the balance is designed to hit zero on the final payment.
- Each instalment pays that month's interest first, then the remainder reduces the capital you owe.
- Since the debt is biggest early on, the opening years are interest-heavy and the closing years pay down capital fast.
- This front-loading is exactly why overpaying in the early years saves disproportionately more interest than overpaying late.
- Total interest is every scheduled payment summed up, minus the amount originally borrowed.
M = P x r / (1 - (1 + r)^-n)
P is what you borrow, r is the monthly rate (the annual rate divided by twelve), and n is the number of monthly payments (years times twelve). The formula sets a level payment M so the balance, growing by interest and shrinking by each payment, reaches zero exactly on payment n. Multiply M by n and take off P to get the lifetime interest.
- P
- Amount borrowed, the purchase price minus your deposit
- r
- Monthly interest rate, the annual rate divided by 12
- n
- Number of monthly payments, the term in years times 12
- M
- The level monthly capital-and-interest payment
Typical mortgage shapes
| Common repayment term | 25 years | 30 and 35 years are increasingly used to lower the monthly |
| Deposit on a first home | 5 to 10% | a larger deposit usually unlocks a lower rate band |
| Loan-to-value for the sharpest rates | 60% or below | borrowing 60,000 against a 100,000 property |
| Stress test many lenders apply | rate + about 1% | they check you could still afford a higher payment |
Worked example
A 200,000 mortgage at 4.5% over 25 years comes to roughly 1,111 a month. Over the full 25 years that adds up to around 333,000 repaid, so about 133,000 is interest. Drop the rate to 3.5% and the monthly payment and the interest both fall noticeably.
Key facts
- On a repayment mortgage the balance is engineered to reach zero on the very last instalment.
- Lower the rate by one percentage point on a 200,000 loan over 25 years and the monthly payment falls by roughly 50.
- Stretching a 200,000 loan at 4.5% from 25 to 35 years trims the monthly by about 165 but adds around 64,000 in interest.
- The interest portion of each payment is highest at the start and smallest at the end, the reverse of the capital portion.
Tips
- Run the term at 25 and 30 years side by side before deciding; the shorter term hurts monthly but saves heavily over the life of the loan.
- A bigger deposit drops your loan-to-value, which often moves you into a cheaper rate band as well as shrinking the debt.
- Overpay in the opening years if your deal allows it, because that is when the balance, and so the interest charged, is largest.
- Re-run the figure with the reversion rate before any fixed period ends, so a jump in the monthly payment does not catch you out.
Same 200,000 loan at 4.5%, different terms
| Term | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 20 years | 1,265 | 103,672 | 303,672 |
| 25 years | 1,112 | 133,498 | 333,498 |
| 30 years | 1,013 | 164,813 | 364,813 |
| 35 years | 947 | 197,534 | 397,534 |
Frequently asked questions
Is this repayment or interest-only?+
Repayment. Every instalment settles the interest and shaves off some capital. An interest-only mortgage keeps the balance flat, costs less each month, but leaves the full debt to repay at the end through other means.
Are fees and insurance covered?+
No. This is the core capital-and-interest payment only. Arrangement and product fees, valuation costs, and buildings insurance all sit on top and vary by lender.
What happens when my fixed rate ends?+
The figure assumes one rate for the whole term. On a fix-then-revert or tracker deal the payment recalculates whenever the rate moves, so re-run it with the new rate to stay accurate.
Should I pick a shorter term?+
A shorter term raises the monthly payment but cuts total interest sharply, because the balance is outstanding for fewer years. Balance the higher commitment against the long-run saving.
Things to watch
- This is general information, not financial advice; a broker or lender can quote your actual rate and eligibility.
- The result holds the rate constant for the whole term, so a fix that reverts to a higher variable rate will cost more than shown.
- Arrangement fees, valuation costs and buildings insurance are excluded and can add several thousand over a deal period.
Last updated: 2026-01-01
This is an estimate for general guidance, not financial, tax, legal or medical advice. Figures can change and individual circumstances vary. Always confirm with the official sources listed before making decisions.
- This is general information, not financial advice.
- Excludes fees, insurance and any rate change after an introductory period.
- Assumes a constant rate and no overpayments or payment holidays.
Reviewed by Vikas Dulgunde.