What are interest rates?

  • Interest is what the lender earns
  • Interest rates change
  • Rates change when cash rates change
  • Determine your payment flexibility

The interest rate is a rate which is charged to you for the use of the funds (loan amount) lent to you by the lender.

The loan amount is known as the Principal and the amount of interest payable is often expressed as an annual percentage rate of the Principal.

For example, if a lender charges an interest rate of 7% per year on a loan of $100,000, then the interest payable would be $7,000 per year.

Interest rates often change as a result of inflation, the state of the economy, and the Reserve Bank of Australia policies. To see more information about the Reserve Bank of Australia and the current policy interest rate (official cash rate) go to www.rba.gov.au

It is important to note that when the official interest rates change either upwards or downwards mortgage lenders can increase or decrease their rates accordingly; however they are not obligated to pass on the full increase or decrease.

When applying for a mortgage you may wish to consider whether a fixed or variable interest rate is better suited for your needs.

With hundreds of different loan products in the market from all lenders, it can be a daunting time to go shopping for a home loan if you are doing it yourself or don't know what to look for. The benefits of why you should use a professional Time Finance Mortgage Broker are guaranteed.

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Depends on the size of your deposit, the value of the property, and your servicing capacity (based on your income and how much you are able to repay).


Most mortgage lenders will require a deposit of 20% or more of the property price. Less may be required however will require mortgage guarantee insurance in most cases


Depends on the type of loan, intrerestr rate, payment term, and whether you pay monthly or fortnighly. Use us mortgage calculators to guide you.


Every state is different and may depend on the value, whether you are building or buying an established home. Read more in our FHOG article


It is a rate that includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure that lets you compare loans from differengt lenders on a fair comparison.


This 'in principle approval' is usually valid for 3 months. Gives you the confidence on how much you can borrow before your purchase a property.


The cost of Stamp Duty varies between States and Territories. Subject to your personal loan circumstances, the cost of stamp duty can be included in the loan amount you borrow.

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