What does 0.5% really cost on your mortgage?
On $600,000 over 30 years, moving from 6% to 5.5% lowers the monthly repayment by $191 and the interest over the life of the loan by $68,605. Compare two rates on your own loan below.
At 5.5% instead of 6%, your repayment would be about $191 a month less.
The figures above are an example. Saving this to an account is offered once the loan amount and interest rate are your own.
What this estimate covers
- What you owe and the years left on the loan
- Your current rate and the rate you are comparing
- Standard principal and interest repayments
Common questions
How much does 0.5% cost on a $600,000 mortgage?
On $600,000 over 30 years, moving from 6% to 5.5% lowers the monthly repayment by $191, which is $2,287 a year, and cuts the interest over the life of the loan by $68,605.
What happens to my repayment if my rate goes up by 0.5%?
The same sum in reverse. From 6% to 6.5% on $600,000 over 30 years, the monthly repayment rises by $195, which is $2,341 a year, and the interest over the life of the loan rises by $70,238.
How is the repayment worked out?
With the standard principal and interest formula, the same one the Australian Securities and Investments Commission (ASIC) Moneysmart mortgage calculator uses: the monthly rate is the yearly rate divided by 12, over the number of months left on the loan. Enter your own balance, years left and two rates for your figures.
Does the Reserve Bank cash rate change my home loan rate?
Not directly. The Reserve Bank of Australia (RBA) sets the cash rate, and each lender decides its own home loan rates and whether to pass a change on. Check your lender for the rate you are charged.