Bond Yield to Maturity (YTM) Calculator Australia

Yield to maturity, explained

Yield to maturity (YTM) is the total annualised return you'd earn on a bond if you bought it at the current market price and held it to maturity, assuming all coupons are received and reinvested at the YTM. It's the single most-used yardstick for comparing bonds. The approximation in this calculator uses (annual coupon + (face − price)/years) ÷ ((face + price)/2) — accurate to within ±0.1% of the true iteratively-solved YTM for typical inputs.

YTM is inversely related to price: when bond prices fall, YTMs rise (because you're getting more return for less invested), and vice versa. Long-duration bonds are more price-sensitive than short — a 30-year bond loses ~10% of its price for each 1% YTM rise; a 2-year bond loses ~2%. This duration sensitivity matters more than coupon rate for capital values during a rate-cycle.

Australian Treasury fixed bonds pay coupons semi-annually; corporate fixed bonds usually quarterly. Treasury Indexed Bonds (CIBs) have CPI-linked principal and use a different formula (real yield + inflation). Floating-rate notes have a margin over BBSW rather than a fixed YTM. This calculator covers fixed-coupon bonds only.

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Methodology & sources

Uses the standard YTM approximation formula: YTM = (annual coupon + (face value − price)/years to maturity) ÷ ((face value + price)/2). Accurate to within ±0.1% of true iteratively-solved YTM for typical inputs. Doesn't model: semi-annual vs annual compounding adjustments, CIB / floating-rate / callable bond formulas, Australian withholding tax for non-residents, or accrued interest at purchase. General information only.

Estimates only. This calculator is not intended to be relied on for making a decision about a financial product, and it does not consider your objectives, financial situation or needs. Consider obtaining advice from an Australian financial services licensee before making any financial decisions. Assumptions can be changed where shown; statutory rates are as legislated for the year stated on this page. How our calculators work, their assumptions and limitations →