How do interest rates affect your home loan?
Whether your rates and repayments change during the life of your loan will depend on the type of home loan you have.
What happens if you have a variable rate loan?
If you have a loan with a variable rate, your repayments vary when the interest rate rises and falls. The variable interest rates change due to the many factors that impact our cost of funds. One of those factors is the official cash rate, which is set by the RBA. Following the recent changes to the official cash rate, our interest rates have changed.
View your interest rate
You can find your current interest rate that applies to your home loan under the Account details section of your home loan in the NAB app and NAB Internet Banking.
View historical changes to your interest rate
You can see historical changes to your interest rates in your home loan statements, which can be downloaded in the NAB app and NAB Internet Banking.
What happens to your repayment when interest rates change?
Your minimum required repayment will not automatically change. We will give you at least 30 days’ notice if there’s an increase to your required repayments. We’ll send a letter in the mail or an email letting you know you’ve got a letter in NAB Internet Banking. Use this guide to learn how to view your letters in NAB Internet Banking.
Your minimum required repayment will be automatically adjusted if you have a direct debit linked.
If you’re paying more than required, you may not need to adjust your repayments until your minimum instalment amount exceeds those repayments. Being ahead could give you the opportunity to reduce your instalment amount if you need to.
Check your minimum instalment amount
You can find your minimum instalment amount that applies to your home loan under the Repayments section of your home loan in the NAB app and NAB Internet Banking.
What happens if you have a fixed rate loan?
If your home loan has a fixed interest rate, your repayments won’t change until the fixed term on your loan expires.
We’ll let you know when this is approaching and what your options are. In the meantime, you can use the tools and tips on this page to consider what your future repayments may be and any changes you can make to your spending habits now to prepare.
Adjusting your repayments
You can use the NAB app to make changes to your direct debit and periodic payments.
- Log into the NAB app and select your home loan account.
- Tap the Manage button.
- Scroll down and tap View scheduled payments.
- Select the Direct debit | Periodic scheduled payment.
- Tap Modify payment.
Scenario planning for the future
It’s a good idea to see what your repayment change could be over time if interest rates increase using scenario planning.
As an example, this table shows the impact of an interest rate rise with the extra cost per month based on a 30-year NAB Tailored Home Loan variable rate of 4.04% p.a. The change to a monthly repayment depends on the size of the loan and the rate increase.
| Size of loan | Rate increase | Extra cost per month (estimate) |
|---|---|---|
| $500,000 | 0.25% p.a. | $73 |
| $500,000 | 0.50% p.a. | $146 |
| $500,000 | 1.00% p.a. | $297 |
| $500,000 | 2.00% p.a. | $612 |
Explore your repayments in different scenarios
To help with scenario planning you can use our home loan repayment calculator, starting with where you are at right now and explore scenarios.
What you can do to prepare for an increase in repayments
Review your current position
Consider reviewing your lifestyle expenses, budget and savings to see if you need to make changes and be ready to meet higher repayments.
Check if you’re ahead on your repayments
Variable rate loans come with the flexibility to make extra repayments and many of our customers have used this to pay ahead on their home loan.
You can find out if you’ve paid ahead by looking for your available redraw in the NAB app or NAB Internet Banking. The funds in your available redraw will be considered when we make changes to your repayment amount. If you access your redraw, your repayment amount may be impacted.
Self-manage your home loan
Depending on the type of loan you have, there are multiple ways you can manage your repayments, and many are available 24 hours a day, seven days a week.
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If you’re sufficiently ahead of your loan and have surplus funds available on your home loan, you may want to use these funds as a buffer or for emergencies.
The amount you can redraw at a time depends on how far ahead you are of your scheduled repayments. There's usually a minimum and maximum amount you can redraw. It’s important to check how much you have available to redraw before you make any commitments.
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Linking an offset account to your eligible variable rate home loan helps you pay off the loan faster. If you’re ahead on your home loan, it gives future options to talk to us about adjusting your minimum repayment amount. You can link your NAB transaction account to an existing eligible home loan via the NAB app.
Fixing the interest on all or part of your loan can give a period of repayment certainty and if you split your loan between fixed and variable rate you will still have flexible features like offset available on your variable portion.
Do you think you might miss a payment?
If you’re in financial difficulty, please get in touch with us at NAB Assist as soon as you can so we can discuss your options. You’ll also find a range of helpful information and support services from NAB Assist in our Customer Care Kit.
Contact us for home loan related queries
Book an appointment
Make an appointment to see us at your nearest branch, ask a mobile banker to come to you or ask us to call you back.
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Terms and Conditions
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The information contained on this webpage is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information on this webpage.
Terms, conditions, fees, charges, eligibility criteria and lending criteria apply for all NAB products (available on request).
Correct as at 19 August 2022.