Compound Interest Calculator
Calculate the compound interest which accumulates on your home loan or savings account with this handy calculator.
What is compound interest?
Compound interest is interest which is calculated on the balance of debt owed, as well as any interest accrued on interest not yet paid which increases the balance. As this involves on an ever increasing balance owed the interest payable increases, in turn increasing the rate of debt growth each month – hence the term ‘compound interest’. Due to the accelerating nature of compounding interest on both what is earned on savings and payable on loans, it can be both a significant benefit to savers and a substantial risk to borrowers who do not work to pay their interest ongoing and pay down their debt balances owing with principal and interest repayments.
Compounding interest teaches two important lessons – that growing your asset base including savings will help you grow your asset base in the future; and its important to be careful of debt to be allowed to increase through capitalised interest creating spiralling debt which may become unsustainable.
One unique product in Australia which includes compounding interest accrued are Reverse mortgages. Check out how this works with our reverse mortgage calculator.
Do you need assistance understanding how compound interest works? Speak with a broker today.
Disclaimer: The calculations do not take into account all fees and charges. The results provided by this calculator are an estimate only, and should not be relied on for the purpose of making a decision in relation to a loan. Interest rates and other costs can change over time, affecting the total cost of the loan. Borrowers should consider discussing their individual situation with a qualified Australian Credit Licensee or authorised Credit Representative.