If you have a variable home loan and interest rates increase, does your repayment amount stay the same and just the interest portion of the repayment amount increase?

Hi Bill,
Yes, the amount of your repayment allocated to interest will increase if there is a rate rise.
Your repayment will stay the same as long as there is enough room to still pay your loan off within the remaining term.
For example, if you took your loan out at 5.25% and have not reduced your repayments as the interest rate has fallen, you would not be required to increase your repayments until rates got back above 5.25%

Hi Biill, yes the repayment will increase according to the minimum amount required based on principal and interest payments over the term. The bank would send a letter to notify you of the increase and when the payment would change if you were making payment by direct deposit you would need to increase accordingly.

Please feel free to phone me if you want to chat further.
Cheers
Meiken

Hi Bill, yes :)

Bill. Hi. I endorse the previous comments from Scott Howell. Absolutely the correct answer, however, I add my two cents worth for the following reasons
1) Interest rates are currently falling, so if you have actually experienced an increase in recent times, then it would be a perfect time to review your needs.
2) I note that we are quite close in physical distance. Therefore should you wish to meet and discuss, I would be happy to be available.
Please feel free to call if in need.
Regards
Ken Olds

Fluctuation in interest rates will change your entire amortization schedule i.e. velocity at which you are paying off your home and it will adjust it to ensure you are using your full term 30yrs in most cases. Cheers Harish

If rates go up so does your repayment so you pay off them loan in the term agreed to. The ratio of capital to interest may remain the same but interest increases.

Good question Bill. As mentioned by others her if rates increase it does normally mean your repayments will. There are exceptions to yhis with loans call intrrest only based payments. With these loans the repayments are set initially based on the current rate. If rates drop like the have recently the interest amount drops but the payments rem as in the same. As a result until interest rates rise above the intial rate the repayments don't change.
Hope this helps

Hey Bill, you can actually model the impact (before and after) using this calculator

https://unohomeloans.com.au/home-loans/#refinance-calculator

This presumes the same amount each month, in reality a variable loan is calculated daily and so months with different days will have slightly different monthly payments.

We also have a fixed rate calculation that can show you the longer term impact of not fixing if this is your real concern. It's just not web enabled yet, so you'll need to reach out to us directly.