How Canwi models loans - Real-Time (But Not a real-life replica)

There are planned enhancements to our loan repayment modelling

We use two different approaches for modelling loan repayments in Canwi;

When looking at the overall projection on the planning screen - we use a calculation method that’s consistent with many online loan and mortgage repayment calculators (including those provided by Banks & other lenders). While consistent with other online loan calculators we want to be transparent that this calculation method is an estimate and as an excellent article from Figura Finance notes - will result in a projected total repayments / interest which could be out by $10,000+ over the life of an entire typical mortgage.
Within events (e.g. Buy a Home, Buy a Vehicle of Make Additional Debt repayments) we run an accurate day simulation - providing a highly accurate / precise simulation of the life of the loan consistent with both real-life and a small number of (excellent) online calculators (like figura.finance).

We take the estimated approach (instead of a day simulation) on our overarching planning screen because we run our overarching model every time you make a change to your plan and want it to update in as close to real-time as possible. Canwi gives you the flexibility to modelling a huge number of possible decisions all within one plan (you could have 50 different loans + a range of additional super contributions + investing + selling properties where we're calculating CGT implications etc... a LOT of calculations to run) - the estimated approach is significantly less resource hungry and so allows us to support these calculations in real-time without lag - where a day simulation across all of this would not be performant.

Loan calculations for the overall projection approach: Performant & reasonable for long term planning

We determine the repayment amount using a PMT function. The PMT function, which stands for “Payment,” enables you to determine the regular payment needed to repay a loan or investment over a specific period. It considers the principal sum, the interest rate, and the length of the loan. This is the same function you could use in Excel by entering in =PMT() to a cell.

We then determine the number of repayments per year depending on the repayment frequency using Rounded interval calculations. i.e.

Monthly: 12 Repayments

Fortnightly: 26 Repayments

Weekly: 52 Repayments

Next we iterate over repayment periods following this pattern:

Charge interest for the repayment period.
We calculate this by multiplying the loan balance (minus the offset balance) by the annual interest rate, and dividing by the number of repayments per year.
Reduce the repayment from the loan balance.
Repeat 🔁 until the loan balance is zero.

You can see an example schedule over the course of a single year here for a Loan with:

An initial balance of $920,000
An offset account with $41,000 dollars in it
Fortnightly repayments of $2545 (more than the minimum repayment amount)
An interest rate of 5.78%

And within Canwi the equivalent loan (and offset) after a year.

Assumptions

Fees Excluded: No up-front, ongoing, or end-of-loan fees are modelled.
Static Offset balance: Because we're running a yearly simulation - we only calculate offset balance changes at the end of the year so if your Offset Balance was $20,000 at the start of the year but your plan results in a net cashflow of $10,000 over the course of the year - we will still only take that into account in the next calendar year. If your net cashflow in a year is positive then the impact of the offset will be more conservative (i.e. less than) it likely would be in real life. If your net cashflow in a year is negative then the impact of the offset will be great than it likely would be in real-life (assuming you have a linear expenditure throughout the year)
Interest Compounding: Interest is compounded at the same frequency as repayments (weekly, fortnightly, or monthly).

Why am I seeing different projected loan repayment details in Canwi vs X online calculator OR my actual loan?

If you've never looked too closely at different loan or mortgage calculators online, worked in a mortgages team in a bank or studied accounting - you'd be forgiven for assuming there's a standard way loans are calculated. There isnt.

The reality is:
1. Most loan calculators work differently from one another, and
2. Even real-world loans themselves are handled differently by different lenders.

First - Lets start by looking at how Loan Calculators themselves differ

Online loan calculators often use simplified assumptions (much like we do) to make repayment & interest estimates. While they usually aim to give you a quick, easy-to-digest answer, the methods behind them can vary quite a bit.

Some of the key ways calculators differ include:

When and how interest is charged - e.g. calculating interest on every repayment vs. once per month.
Assumed year length - some divide interest by 365 days, others by 360, and some (though very few) calculate interest based on 366 days in leap years.
Repayment frequency assumptions - weekly, fortnightly, and monthly repayments may be treated as equivalent across tools, even though they aren't in reality.
Rounding logic - many calculators skip over transaction-level rounding, which compounds over time.

We've include real examples of these differences below, with screenshots and links so you can see exactly how different tools behave.

Calculator	Calculation notes	Screenshot *(With consistent 800k loan, 5% interest and 30 year term)*
Westpac	Estimated This calculator doesn’t take into account compound interest savings. i.e. When selecting fortnightly repayments the interest is still debited fortnightly. Weekly and fortnightly repayment calculations - if your monthly repayments are $1000, fortnightly repayments are calculated by dividing $1000 by 2 and rounding up if required ($1000 ÷ 2 = $500). Weekly repayments are calculated by dividing $1000 by 4 and rounding up if required ($1000 ÷ 4 = $250). i.e. We end up with 24 Fortnights per year, 48 weeks per year.
Commonwealth Bank
Suncorp
⭐ Figura Finance	Daily loan simulation with the ability to select the calculation method: Actual/365 Actual/Actual 30/360 Actual/360

Secondly - How Real-World Loans Differ

It’s not just calculators - actual bank loans can vary, depending on the lender, product, and terms. Two loans with the same rate and balance can behave differently depending on how they’re structured. For example:

Interest calculation method: Interest is typically calculated based on the Daily Percentage Rate - to work that out many lenders use Actual/365, others use Actual/360, and a few even use Actual/Actual (adjusting for leap years and month lengths).

Lender	Days Per Month	Days Per Year
CBA, NAB, Westpac, AFG	Actual	365
Bendigo Bank	Actual	Actual (365 or 366 in leap years)
ANZ	Actual	360

There are some screenshots below which show the lending terms & conditions from a random sample of banks / lenders. (Screenshots and data above accurate as of 11/07/2025)

Reference: ANZ terms

Reference: Bendigo terms

Reference: CBA terms

Interest debiting

Provider / Loan	When interest is Debited
Macquarie - Consumer Lending	(a) Interest charges are normally debited to your Account monthly on the same day that your scheduled repayment is due in respect of interest accrued in the previous month. (b) Interest charges debited to your Account form part of the Total Amount Owing and become part of the balance on which future interest charges are calculated. (c) Interest may also be debited to your Account: (i) when any repayment is made; (ii) immediately before you repay the Total Amount Owing; (iii) whenever the loan is in default; (iv) if we increase your loan amount or vary your Loan Agreement; and (v) on the day the final repayment is due
Macquarie - Home Loans	Interest charges are normally debited to your Loan Account monthly in arrears from the Settlement Date, and become part of the balance on which future interest charges are calculated. If you have a Loan Account in an interest only period, interest charges are debited to that Loan Account at the same frequency as your interest only repayment. If interest is scheduled to be debited on a weekend or a national public holiday, interest will be debited on that day. Interest may also be debited: a. each time a repayment is made; b. the day after a fixed period ends; c. immediately before you repay a Loan Account in full; and d. on the day the final repayment is due

What does all this mean?

Over the life of a loan, these differences do add up - as platforms like Figura show, calculators using this approach can be off by $10,000+ in projected interest over the life of a mortgage (particularly if using Fortnightly or Weekly repayments), depending on the scenario.