See exactly what a 0.25% rate rise adds to your monthly repayments, for principal and interest or interest only loans.
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Check Your Eligibility in 60 Seconds ๐ Call John on 02 8046 3933A 0.25% rise adds roughly $21 a month per $100,000 of interest-only borrowing. On principal and interest loans the dollar impact is smaller, because only the interest portion of your repayment moves with the rate. The table below shows illustrative figures for a single 0.25% rise, assuming a current rate of 6.00% p.a. and, for principal and interest, 25 years remaining.
| Loan balance | Interest only, extra per month | P&I (25 yrs), extra per month | P&I, extra per year |
|---|---|---|---|
| $500,000 | +$104 | +$77 | +$922 |
| $750,000 | +$156 | +$115 | +$1,383 |
| $1,000,000 | +$208 | +$154 | +$1,844 |
Illustrative only, at an assumed current rate of 6.00% p.a. with a 0.25% rise. Your actual figures depend on your rate, balance, remaining term, and how much of the rise your lender passes on. Use the calculator above for your own numbers.
I see the same pattern after every RBA announcement: borrowers absorb the rise, adjust the budget, and move on. Lenders count on that. The sharpest rates are usually reserved for new customers, so the longer you sit on the same loan, the wider the gap tends to grow between what you pay and what you could be paying. A rate rise is the natural moment to check, because every lender reprices at a slightly different time and by a slightly different amount, and that is exactly when better deals open up.
Before you absorb another $90 to $200 a month, spend five minutes on it. Run your numbers through the refinance savings calculator, or read how the process works on our refinancing page. I compare your loan against a 50+ lender panel, the service is free, and there is no credit check until you decide to proceed. Worst case, you confirm your current loan is still competitive and you have lost nothing.
On an interest only loan, every dollar of your repayment is interest, so a rate rise flows straight through: balance multiplied by the rise, divided by 12. That is where the $21 per $100,000 rule of thumb comes from.
On a principal and interest loan, your repayment is recalculated using the standard amortisation formula over your remaining term. Part of each repayment is principal, and that part does not grow when the rate rises, so the same 0.25% produces a smaller dollar increase than on an interest only loan of the same size. The shorter your remaining term, the bigger the principal portion of each repayment and the smaller the rise in dollar terms. That is also why this calculator only asks for your remaining term when you select principal and interest.
These figures are estimates only and general information, not credit advice or an offer of credit. Actual repayments depend on your lender, your loan contract, and how much of any RBA change is passed on. Consider your own circumstances and seek advice before acting. Lend & Loan ACL 511092.