Is my loan amount (principal) reducing?

When you make your principal and interest repayments, a proportion repays the principal amount and a proportion goes towards paying the interest amount.

However, for the first half of your loan term, a higher proportion of your minimum monthly repayments goes towards the interest amount. As you continue to repay your loan over the term, a higher proportion of your repayment will go towards your principal amount.

Graph showing a typical loan example – loan amount $400,000, variable interest rate 5.57%p.a., loan term of 30 years – and how, for the first half of the loan term, a higher proportion of the minimum monthly repayments goes towards the interest amount. As you continue to repay the loan over the term, a higher proportion of the repayment will go towards the principal amount.

Helpful guides

We’ve broken down the reasons why principal and interest payments may work for you.

Little changes you make now can have a big impact on how much you end up saving in time and money.

Common (but confusing) home loan and home buying terminology explained in plain English.

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