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 toward 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

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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