What is the Henderson Poverty Index?

The Henderson Poverty Line (HPI) is a benchmark published quarterly by the Melbourne Institute that measures the minimum income needed to meet a household's basic needs. It is widely used by lenders and courts to assess living-expense floors.

Should I use the headline rate or the comparison rate?

Use the comparison rate for a more honest estimate. It bundles in standard fees so you compare apples to apples between lenders.

What does Interest-Only do?

Interest-only repayments cover only the interest charge, leaving the principal unchanged. Common with investment loans for tax reasons; risky for owner-occupiers because the loan balance never reduces.

Mortgage Repayment Calculator

Q: Why does fortnightly save money?

A fortnightly repayment equal to half the monthly amount means you make 26 payments per year instead of 12 — that's an extra month's repayment per year, paid into the principal early, compounding the interest savings.

Australian-tuned. Weekly/fortnightly/monthly, P&I or interest-only, extras, with a Henderson Poverty Index affordability check.

Loan details

Loan amount

Interest rate (annual %)

Compare with a bad-credit rate Adds 4.5% to your rate (typical bad-credit lender premium) and shows the cost side-by-side. Term (years)

Repayment frequency

Repayment type

Optional: extra repayments & offset

Extra per repayment ($)

Offset balance ($)

Money sitting in your offset account reduces the interest charged, as if it had been paid off the loan.

Your repayment

per fortnight

Total interest

Total paid

Time to repay

0 yrs

Saved by extras

Can you actually afford this?

Lenders use the Henderson Poverty Index (Melbourne Institute, updated quarterly) as a living-expenses floor. We compare your remaining income after this mortgage to the HPI for your household type.

Household

Household net income (per month, after tax)

⚪

Enter income to check affordability

HPI figures based on Melbourne Institute Sept Quarter 2024 estimates (including housing). Verify the latest at melbourneinstitute.unimelb.edu.au. This calculator is for guidance only — not financial advice.

How to use this calculator (and what it means)

Most online mortgage calculators give you a number and stop there. The number is meaningless unless you know whether you can actually live on what's left. That's why we layer the Henderson Poverty Index on top.

Why fortnightly beats monthly

A fortnightly repayment of half the monthly amount means 26 payments per year instead of 12. That's an extra month's repayment going into the principal each year — and because it's hitting the loan early, it compounds. On a $600,000 loan at 6.2% over 30 years, switching to fortnightly typically saves ~$80,000 in interest and ~5 years off the loan. Set it and forget it.

P&I vs Interest-Only

P&I (Principal & Interest): Each repayment chips away at both. The default for owner-occupiers — your loan balance actually reduces.
Interest-Only: You only cover the interest charge. Loan balance never moves. Common for investment loans (interest is tax-deductible on investment debt). Risky for your own home — you're renting from the bank.

The HPI traffic-light

Green — your post-mortgage income is more than 130% of the HPI for your household. You have meaningful buffer.
Amber — between 100% and 130% of HPI. You can pay the bills, but a rate rise or a sick week hurts.
Red — below the HPI. Lenders will likely decline. If they don't, you can't actually live on what's left.

FAQ

What rate should I use?

Use the comparison rate, not the headline. The comparison rate factors in standard fees so you're comparing apples to apples between lenders. APRA also requires lenders to stress test you at headline + 3% — so model that scenario too if you're at your borrowing limit.

Does the bank actually use HPI?

Yes — most major Australian lenders use the HPI as a living-expenses floor in their serviceability assessment. If your declared expenses are below HPI, they substitute the HPI figure.

Should I include LMI?

If your deposit is below 20%, lenders' mortgage insurance is added to your loan. Add the LMI premium to your loan amount before calculating. Use a separate LMI calculator if you don't know your premium yet.

Are these numbers exact?

This calculator uses the standard amortising-loan formula and the published HPI tables. Your lender's actual quote will be within a few dollars per repayment. Always confirm with the lender's contract.

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Important — general information only, not financial advice.

This calculator is provided for general information and education. It is not financial product advice or credit assistance and does not consider your personal objectives, financial situation, or needs. Outputs are estimates and will differ from a lender's formal quote. Actual interest rates, fees, comparison rates, lender policy, and serviceability assessments vary by lender and change without notice.

Before borrowing, obtain personal advice from a licensed mortgage broker, financial adviser, or accountant who can assess your full circumstances. Past performance and historical interest rates are not a reliable indicator of future outcomes.

Legal Practice Holdings Group Pty Ltd (ABN 12 615 900 788) does not hold an Australian Financial Services Licence (AFSL) or Australian Credit Licence (ACL) and does not provide credit assistance. By using this calculator you acknowledge you have read this disclaimer.