Lenders in Australia calculate and accrue interest charges every day, for instance an advertised interest rate of 5% per annum is actually charged at 5 divided by 365 (or 366 in 2016) per day. These daily interest accruals are added up once a month and the total monthly amount is charged to you, usually via the home loan account.
Making extra repayments will significantly reduce the amount of interest you get charged. Extra repayments are repayments made earlier and larger than the minimum repayment obligation set out in the loan contract.
This information in this article is general only and does not take into account your individual circumstances. It should not be relied upon to make any financial decisions. uno can’t make a recommendation until we complete an assessment of your requirements and objectives and your financial position. Interest rates, and other product information included in this article, are subject to change at any time at the complete discretion of each lender.