{"menuItems":[{"label":"Home loan rate rise calculator","anchorName":"#home-loan-rate-rise-calculator"},{"label":"How to use the rate rise calculator","anchorName":"#how-to-use-the-rate-rise-calculator"},{"label":"How will an interest rate rise affect my mortgage?","anchorName":"#how-will-an-interest-rate-rise-affect-my-mortgage"},{"label":"How do you calculate an increase in interest rate?","anchorName":"#how-do-you-calculate-an-increase-in-interest-rate"},{"label":"My interest rate is rising: What are my options?","anchorName":"#my-interest-rate-is-rising-what-are-my-options"}]}
Learn how to refinance in under a fortnight with our free step-by-step refinancing guide
You'll receive exclusive tips from Finder's refinance experts straight to your inbox.
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.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206) and a Tier 1 Generic Knowledge certification (RG 146).
Home equity can help you access extra financing from lenders to spend on things like home renovations or investment properties. Find out how you can calculate the equity in your home.
Want to know how to calculate monthly repayments on your new mortgage? In five steps our free home loan repayment calculator crunches the numbers for you.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please note that the information published on our site should not be construed as personal advice and does not consider your personal needs and circumstances. While our site will provide you with factual information and general advice to help you make better decisions, it isn't a substitute for professional advice. You should consider whether the products or services featured on our site are appropriate for your needs. If you're unsure about anything, seek professional advice before you apply for any product or commit to any plan and read any disclosure documents (such as any Target Market Determination (TMD) and/or Product Disclosure Statement (PDS)) issued by the provider before making a decision.
Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan, we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
