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Interest rates and mortgages
Who decides your mortgage rate, and what does a rate rise really cost?
When the news says “rates went up”, it means the Reserve Bank lifted its cash rate. Banks pass that on to people with variable mortgages, usually within weeks.
Enter a loan and a rate to see the repayment, and what each quarter-point move adds or saves.
- Monthly repayment
- $3,675
- Interest over the loan
- $722,933
- Each 0.25 point rise adds
- $98
| If rates move by | New rate | Repayment | Change a month |
|---|---|---|---|
| −1.00 pts | 5.20% | $3,295 | −$380 |
| −0.50 pts | 5.70% | $3,482 | −$192 |
| −0.25 pts | 5.95% | $3,578 | −$97 |
| +0.25 pts | 6.45% | $3,773 | +$98 |
| +0.50 pts | 6.70% | $3,872 | +$197 |
| +1.00 pts | 7.20% | $4,073 | +$398 |
The government doesn’t set this rate. The Reserve Bank, which is independent, sets the “cash rate”, and banks move mortgage rates with it. The Bank raises rates to slow spending when inflation is too high, and cuts them when the economy needs a push.