Perhaps the most influential factor on a person’s home loan repayments is their interest rate. It determines how much interest is charged on each dollar borrowed
And it can have a big impact on the size of a person’s mortgage repayments.
Take a look at how a single percentage point can make a notable difference to the repayments on a 30 year, $400,000 loan @ 6.39% interest:
| Annual Interest Rate | Monthly Instalment | Difference |
|---|---|---|
| 5.39% | $8,273 | -$943 |
| 5.64% | $8,505 | -$712 |
| 5.89% | $8,739 | -$477 |
| 6.14% | $8,977 | -$240 |
| 6.39% | $9,217 | $0 |
| 6.64% | $9,459 | $243 |
| 6.89% | $9,704 | $488 |
| 7.14% | $9,952 | $736 |