Home Loan rate rise calculator
Stay ahead of rising mortgages with Finder's rate rise calculator. Crunch your costs now so you can plan for them in advance.
Home loan rate rise calculator
How to use the rate rise calculator
Enter the following details into the calculator (or estimate them if you don't know):
- Select your repayment type. Most borrowers have principal-and-interest repayments. This means you're paying back the loan plus interest. If you're not sure, just select that option for now. If you have an interest-only loan you're just paying the interest charge every month but not actually repaying the loan yet.
- Enter your remaining loan amount. Check your latest home loan statement and see how much you have left to repay on your home loan.
- Enter your current interest rate. Again, your home loan statement should have your current interest rate.
- Enter the new, higher rate. This is your current interest rate, plus however much your lender is raising rates. If your current rate is 3.50% and your lender is raising rates by 50 basis points, then your new rate is 4.00%.
- Enter your remaining loan term. Most home loans have a 30-year term. Estimate how long you have left on your loan, to the nearest year.
How will an interest rate rise affect my mortgage?
Even a small rise in interest rates can have a big impact on your monthly repayments. The higher interest rates rise the more interest you have to pay.
How much difference does 0.5% make on a mortgage?
Recently, the Reserve Bank of Australia (RBA) has increased interest rates by 0.5%, or 50 basis points, multiple times. This is a big rise and costs borrowers hundreds of dollars a month.
Here's a quick example using a fairly average borrower scenario:
| Loan details | |
|---|---|
| Loan amount | $600,000 |
| Term | 30 years |
| Interest rate | 3.50% |
| Monthly repayment | $2,694 |
Now let's try that again with a higher rate. Every other loan detail is the same.
| Loan details | |
|---|---|
| Loan amount | $600,000 |
| Term | 30 years |
| Interest rate | 4.00% |
| Monthly repayment | $2,864 |
Here we see that a rate rise of 50 basis points works out to a monthly cost increase of $170. Over a year, that works out to $2,040 more you'll have to pay in interest.
How do you calculate an increase in interest rate?
To work out how much a rate rise will cost you, you need your loan amount, remaining loan term and the old and new interest rates.
Then you can use the calculator above to get a simple estimate. The calculator simply tells you the difference in monthly repayments between the old and new rate.
This doesn't include the cost of any ongoing loan fees you may have, but it's a simple way to calculate the impact of rate rises.
My interest rate is rising: What are my options?
Just because interest rates are rising doesn't mean you're stuck. There are always better deals on the market.
Even when every lender is passing on the RBA's rate increases, these same lenders are often putting out slightly lower offers to attract new customers. While leaving their existing customers on higher rates!
This gives you 2 options:
- Call your lender and ask for a better deal. This is a pretty simple trick and often works great if you see that your lender has a lower interest rate for new borrowers on its website. Just make sure your loan type is the same as the new one, so it's a fair comparison. Call your lender and ask for a better deal. If your lender won't budge, tell it you're going to refinance.
- Refinance your home loan. Switching mortgages is easier than you think. Start by checking out interest rates and then start the refinancing process by applying for the new loan.
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