When Does More of Your Mortgage Payment Go to Principal Than Interest?

The answer is later than most people expect — and extra repayments can move it forward by years.

On a standard 30-year Australian mortgage at 6%, the crossover point — the month when more than half of your repayment finally goes to paying down your actual debt rather than interest — arrives at year 19, month 7. For most of your loan, you are primarily paying your lender, not yourself.

This crossover is called the turning point. Understanding it — and how to move it earlier — is one of the most valuable things you can do as a homeowner.

Why Does It Take So Long?

At the start of a mortgage, your outstanding balance is at its highest — so the interest charged each month is also at its highest. On a $600,000 loan at 6%, your first repayment is around $3,597. Of that, roughly $3,000 is interest and only $597 reduces your actual debt.

Over time, as your balance slowly falls, the interest portion of each repayment shrinks and the principal portion grows. But because the balance falls slowly in the early years, this shift takes a very long time — nearly two decades at typical Australian rates.

The turning point is the month this ratio finally flips: when the principal portion of your repayment first exceeds the interest portion. After this point, each repayment starts doing more work — paying off debt faster and faster. This is the mortgage snowball effect.

Turning Point by Interest Rate — 30-Year Loan

The turning point depends almost entirely on your interest rate, not your loan size. A $400,000 and an $800,000 loan at the same rate hit the crossover in the same month.

30-year term, no extra repayments. The turning point month is the same regardless of loan size at the same interest rate.

How Extra Repayments Move the Turning Point Forward

This is where extra repayments become a powerful tool. Every extra dollar you pay reduces your principal, which reduces the interest component of every future repayment, which moves the crossover date earlier. The effect compounds month after month.

The table below shows how much earlier the turning point arrives on a $600,000 loan at 6% for different extra monthly repayment amounts:

$600,000 loan at 6.00% p.a., 30-year term. Extra repayments start from month one.

An extra $500/month shifts the turning point from year 19 to year 13 — meaning you spend six fewer years in the phase where most of your money goes to interest. That is six additional years where your repayments are doing meaningful work on your actual debt, which is a large part of why extra repayments save so much in total interest.

What Happens After the Turning Point

Once you pass the turning point, the acceleration becomes noticeable. Because more of each repayment now goes to principal, your balance drops faster, which means interest falls faster, which means even more of the next repayment goes to principal. This is the mortgage snowball effect — and it is why the final years of a mortgage are paid off so much more quickly than the first years.

On a standard 30-year loan, the last five years of repayments clear a disproportionately large chunk of debt compared to the first five years. If you can bring the turning point forward — through extra repayments — you are essentially fast-forwarding into the efficient phase of your loan.

How to Find Your Personal Turning Point

The Mortgage Paydown Calculator shows your turning point on the results chart — marked as a reference line on both your baseline and your extra-repayment plan. You can see exactly which month and year the crossover happens, and how your planned extra repayments move it earlier.

1. Enter your loan details in Section 1.
2. Add any extra repayments you are planning in Section 2 or 3.
3. Click Calculate My Paydown Plan — your turning point appears on the balance chart and in the results summary.