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Lump Sum Payment Calculator

A one-off payment removes principal permanently, so it stops accruing interest for every remaining year of the loan. See what a bonus, inheritance or refund would do.

What the lump sum does

Interest saved$—
Time saved—
Balance after payment$—
Repayment (unchanged)$—
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Estimates only, assuming a constant rate and that you keep making the same repayment after the lump sum. Fixed loans often cap extra repayments; check your contract before making a large one.

Is that number right for your situation?

A calculator applies one formula. Lenders apply their own, and they disagree with each other. Send us what you worked out and we will tell you how it looks against real lender policy.

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Why the saving is so large

The repayment stays the same, so the whole lump sum comes off principal. Every dollar removed stops accruing interest for the rest of the term, which is why a payment made early in a loan saves far more than the same payment made late.

The saving shown assumes you keep paying the same amount afterwards. If you reduce your repayment to the new minimum instead, you keep the lower repayment but give up most of the interest saving and all of the time saving.

Redraw and offset keep it available

Putting a lump sum straight onto the loan reduces the balance, but getting it back later means a redraw request, and lenders can restrict or reprice redraw. If there is any chance you will need the money, an offset account achieves nearly the same interest saving while leaving the cash yours to withdraw at any time.

For most people with an emergency fund, offset is the safer default. For money you are certain you will never need, paying it directly onto the loan is simplest.

Common questions

Often only up to an annual cap, with break costs beyond it. Check your contract before paying a large amount onto a fixed loan, or hold it in an offset if your fixed loan permits one.

That depends on your rate, your tax position and your risk tolerance, and it is a question for a financial adviser rather than a mortgage broker. What we can tell you is exactly what the mortgage side of the comparison is worth, which is the figure above.

Only if you ask. By default most lenders keep the repayment the same, which is what produces the time saving. Requesting a reduction to the new minimum resets much of the benefit.

Sooner is better, because interest accrues daily. A single early payment beats the same amount spread over a year.

Benjamin Marzouk

Mortgage broker, LNB Finance

Benjamin Marzouk is the broker behind LNB Finance, working with clients across the St George, Bayside and Sutherland Shire areas from Sans Souci, and arranging finance Australia-wide. He compares more than 60 lenders and is not owned by, or aligned to, any bank.

Credit Representative 551447 under Australian Credit Licence 384324, held by Outsource Financial Pty Ltd. LNB Finance Pty Ltd, ABN 83 668 176 083, and is subject to the Best Interests Duty. Both licence numbers are publicly searchable on ASIC Connect. Read our Credit Guide.

Got a lump sum coming?

We will show you whether it belongs on the loan, in an offset, or somewhere else entirely.

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