Understanding why repayments change

During the life of your home loan, repayments may change to ensure it gets paid within the agreed loan term.

For example, repayments may need to be adjusted after an increase in interest rates - such as a rise in official interest rates or rolling off a Fixed or introductory rate - or after a large redraw.

We regularly recalculate the Required Monthly Repayment Amount needed to repay your home loan within the agreed loan term. The calculation takes into account things like your outstanding loan balance, the current interest rate and the remaining loan term to work out the new minimum repayment amount.

If your repayments do increase

If your repayments do need to increase for whatever reason, we’ll send you a home loan statement with a letter advising you of:

• Your new required repayment amount.
• When it will take effect from.
• Any action you need to take.

You should receive your statement and letter together within 4-6 days of reviewing your loan. We’ll then give you a minimum of 32 days to make sure you have time to make any necessary changes.

If you think you’ll have difficulty meeting the new repayment amount, we have a number of options to help you, such as extending your loan term. The best thing to do initially is speak with one of our Home Loan experts in any branch or call 13 2224 to work out the best solution for you.

Decreases to repayments

While you can request to have your home loan reviewed with a free Home Loan Health Check or reduce your monthly repayments, we don’t ever automatically decrease them for you. This is simply because the vast majority of our customers want to pay off their home loan as fast as possible.

Whenever we reduce variable interest rates, we automatically reduce the interest rate on your home loan. We don’t automatically reduce your repayments though as the most suitable repayment amount is a personal choice you need to make based on your full financial circumstances.

For customers with a home loan on their personal residence, owning their own home outright is their main goal, so leaving repayments unchanged can achieve this sooner.

For other customers like investors, negative gearing and other tax considerations mean that making higher repayments won’t necessarily be in their best interests.

Change your repayments online
If you have a variable rate home loan and you’re making principal and interest repayments, you have the option to lower your repayments in NetBank when interest rates decrease. Whether you just want to free up some cash, look at investment opportunities or take a holiday, it’s a straightforward process.

To decrease your repayments, log on to NetBank, go to the ‘Manage accounts’ tab and select ‘Manage my accounts’. Then simply choose 'Change my loan repayment amount’, select your loan account and follow the prompts.

Reviewing repayments
You can ask us to review your repayments at any time, by visiting one of our branches, calling 13 2224, or going online through NetBank. You can also use our free Home Loan Calculator to work out repayments yourself online.

View more tools & calculators.

 

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