How Our Calculators Work
The formulas, assumptions and worked examples behind every PurchaseWise calculator — explained in plain English.
PurchaseWise calculators are designed to help Australians estimate property and mortgage-related numbers in a simple, practical way. They use standard, well-established formulas and clearly state their assumptions, so you can see exactly how each result is produced.
They are educational tools only. They do not replace advice from a bank, lender, mortgage broker, financial adviser, accountant, solicitor or settlement agent, and they do not assess borrowing capacity or loan approval.
How Mortgage Repayments Are Calculated
For a standard principal-and-interest loan, the calculator works out the fixed repayment needed to pay the loan down to zero over the term. In plain English: it divides the loan into equal instalments, where each instalment covers the interest for that period and a portion of the principal, so that the final instalment exactly clears the balance.
The standard amortisation formula is:
Where:
- M = the regular repayment amount
- P = the loan amount (principal)
- r = the interest rate per repayment period (annual rate ÷ number of periods per year)
- n = the total number of repayments (years × periods per year)
Repayment frequency matters because it changes r and n. The calculator uses the standard Australian convention: 52 weekly, 26 fortnightly, or 12 monthly periods per year.
Worked example.
A $500,000 loan at 6.25% p.a. over 30 years, repaid monthly:
- P = 500,000
- r = 0.0625 ÷ 12 = 0.0052083 per month
- n = 30 × 12 = 360 months
- M = 500,000 × 0.0052083 × (1.0052083)360 ÷ ((1.0052083)360 − 1)
- M ≈ $3,079 per month
Over 30 years that is roughly $1,108,000 in total repayments, of which about $608,000 is interest. (Try this scenario on the Mortgage Repayment Calculator.) Real lender figures may differ because of fees, rounding, interest-rate changes and product features.
For an interest-only loan, the formula is simpler: each repayment just covers the interest for the period, so the repayment = P × r, and the principal is not reduced during the interest-only term. When the interest-only period ends, the loan switches to principal-and-interest and the repayment rises because the same balance now has to be repaid over a shorter remaining term.
How Deposit, Loan Amount and LVR Are Calculated
The Property Purchase Calculator turns a property price and a deposit into the three numbers a lender cares about most: the deposit amount, the loan amount and the loan-to-value ratio (LVR).
- Loan amount = property price − deposit amount
- Deposit percentage = deposit ÷ property price × 100
- LVR = loan amount ÷ property price × 100
The calculator keeps all three in sync — enter a deposit amount and it shows the deposit percentage and the LVR, or enter a deposit percentage and it shows the dollar amount. The LVR gauge flags the 80% threshold, which is where lenders mortgage insurance (LMI) commonly applies.
Worked example.
- Property price = $750,000; deposit = $150,000
- Loan amount = 750,000 − 150,000 = $600,000
- Deposit percentage = 150,000 ÷ 750,000 × 100 = 20%
- LVR = 600,000 ÷ 750,000 × 100 = 80%
At exactly 80% LVR the loan sits on the boundary where many lenders begin requiring LMI. A slightly smaller deposit (for example 15%, giving an 85% LVR) would typically trigger LMI. LVR is one of the key factors a lender uses when pricing a loan. (Try this on the Property Purchase Calculator.)
How Stamp Duty Estimates Are Handled
Stamp duty (transfer duty) in Australia is set by each state and territory, not by the federal government. Each jurisdiction has its own rate brackets, thresholds, concessions, grants and surcharges, and these change regularly — often in state budgets. There is no single national formula.
The PurchaseWise Stamp Duty Calculator applies the verified general transfer-duty rate schedule for the state or territory you select, for the contract date you enter. Where a jurisdiction's rates or rules cannot be verified, the calculator says so clearly rather than producing an unreliable figure.
Worked example (general rate).
- A $750,000 established home in NSW, general transfer duty (no concession): duty is worked out by applying each bracket's rate to the portion of the dutiable value that falls in that bracket, then adding the bracket amounts together.
- The result is approximately $28,162 for a $750,000 dutiable value under the verified NSW general schedule.
- The same $750,000 home in a different state gives a different figure, because the brackets and rates differ. For example, the general-rate figure for $750,000 in Queensland is around $26,775.
Concessions and grants are not automatic. First-home buyer concessions, principal-place-of-residence concessions, off-the-plan concessions, foreign-purchaser surcharges and other reductions depend on eligibility rules that vary by state — including property price caps, property type, whether the property is new or established, and residency requirements. Our general-rate estimate may not reflect the duty you actually pay.
For this reason, every stamp duty result reminds you to confirm the figure with the relevant state or territory revenue office or a licensed conveyancer. See our Stamp Duty & First Home Buyer Costs by State resource for the official source in each jurisdiction, and try scenarios on the Stamp Duty Calculator.
Important Assumptions
Our calculators use simplified assumptions to keep the results easy to understand. They may not include every possible cost, fee, tax, concession, grant, bank requirement or government charge. Specifically:
- They do not confirm whether you can borrow a particular amount.
- They do not assess loan serviceability or eligibility.
- They do not compare lender products or fees.
- They do not provide financial advice.
- They do not guarantee approval, repayments or final buying costs.
- They assume the interest rate you enter stays constant for the term (unless you are testing an interest-only period).
- Stamp duty estimates use general rates and may exclude concessions, grants and surcharges that apply to your situation.
Why Results May Differ From a Lender
A lender or broker may calculate figures differently because they also consider:
Because of this, you should always confirm final numbers with your lender, broker or adviser before making a decision.
Best Way To Use Our Calculators
Use PurchaseWise calculators as a starting point:
- Try different purchase prices, deposits, interest rates and loan terms.
- Compare several scenarios side by side.
- Read the related guides for context on what each number means.
- Then speak with a qualified professional before committing to a property purchase or loan.
Our aim is to help you become better informed before you make major financial decisions — not to replace the tailored advice a licensed professional can give.