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See how inflation erodes your purchasing power over time.
Purchasing Power
$1,063,659.79
Present Value
$780,000.00
Purchasing Power
$571,987.40
Value Lost
$283,659.79
Future Cost
$1,063,659.79
Estimates only - not financial advice. Verify with a qualified professional before making decisions.
$780,000.00 today feels like $571,987.40 in 60 months.
💡Total Interest on $780,000.00: $283,659.79
Purchasing Power Loss: $208,012.60
Sample scenarios using current reference rate data.
Source: RBA & ASIC · Updated 2026-04-01
Source: RBA & ASIC · Updated 2026-04-01
Source: RBA & ASIC · Updated 2026-04-01
An inflation calculator shows how the real purchasing power of a sum of money erodes over time at a given inflation rate. It uses the present-value formula in reverse - the same formula central banks use when comparing real wages or real interest rates across years.
Future cost = Present value × (1 + r)^n | Purchasing power = Present value ÷ (1 + r)^nUsing last year's inflation rate as the long-term assumption.
Single-year readings can be volatile. For long-horizon planning, the central bank's stated target (or a slight buffer above it) is a more stable input.
Ignoring 'real return' when comparing investments.
A 5% savings rate in a year of 4% inflation is only a 1% real gain. Always subtract inflation from nominal returns when comparing long-term options.
Reference formula and educational copy. For AU-specific rate data see the source link in the disclaimer block above. This is not financial advice.
Melbourne real estate acquisitions and investment portfolios are heavily tied to Reserve Bank of Australia cash rate updates, ASIC lending guidelines, and State Revenue Office duties.
The Australian Prudential Regulation Authority (APRA) mandates a 3.0% serviceability buffer for residential mortgages, forcing banks to assess whether borrowers can afford payments at a rate 3.0% above their contract rate.
Borrowing limits are computed using standard compound and reducing-balance amortization schedules to secure reliable repayment paths.
FV = PV / (1+r)^nCommon questions about using this tool for AU.
Built & maintained by: Dhanasekar · Developer
Formula reference: RBA & ASIC
Data last updated: 1 April 2026
This is a free educational tool, not financial advice.
Important: This calculator provides estimates for informational purposes only and does not constitute financial advice. Actual rates and terms may vary. Always consult a qualified financial advisor before making financial decisions.
See how inflation erodes your purchasing power over time.
Purchasing Power
$1,063,659.79
Present Value
$780,000.00
Purchasing Power
$571,987.40
Value Lost
$283,659.79
Future Cost
$1,063,659.79
Estimates only - not financial advice. Verify with a qualified professional before making decisions.
What you could do instead
+47%better
Held as cash
Inflation eats 6.4%/yr - value silently shrinks
Invested @ 8%
Park in equity / index funds at 8% nominal
Original amount
$780,000.00
Original amount
$780,000.00
Future nominal value
$1,063,659.79
Future nominal value
$1,146,075.90
Real purchasing power
$571,987.40
Real purchasing power
$840,437.15
+$268,449.75 preserved
In today's money, you'd hold $840,437.15 of real value vs $571,987.40 as cash - 47% more purchasing power.
Pay 10% extra each month
Pay just 10% extra ($629,186/mo) and save $278,673 in interest, becoming debt-free 58 months earlier.
* Based on 10% overpayment applied every month until payoff.
$780,000.00 today feels like $571,987.40 in 60 months.
💡Total Interest on $780,000.00: $283,659.79
Purchasing Power Loss: $208,012.60