Why interest rates change

Interest rates can shift for a few reasons, including, but not limited to:

Decisions made by the Reserve Bank of Australia (RBA)
Changes in the cost for lenders to fund loans
Whether your loan is for a home you live in or an investment

So, while the RBA’s cash rate plays a role, it’s not the only factor that affects your interest rate and rates don’t always move in line with the RBA.

What happens when your Unloan rate changes

When an Unloan rate change takes effect, it won’t immediately show up in your monthly repayment amount, especially if the change happens mid-cycle.

For example:

If your Unloan rate decreases during your repayment cycle, you won’t see a lower required repayment until the next month. In the meantime, you’ll be paying more towards your principal, which helps reduce your loan balance faster.

The same applies if your Unloan rate increases during a repayment cycle. Your monthly repayment won’t increase until the following cycle, meaning you pay less toward your principal and a little more interest.

How Autopay adjusts

If you currently set Autopay to the minimum repayment amount, we’ll automatically update it to ensure you meet your new monthly repayment amount. This applies whether the rate increases or decreases.

If you currently choose to pay more than the minimum, we won’t reduce your AutoPay amount unless you tell us to, or we needed to increase it to cover the new monthly repayment amount.

Want to make a change? You can do that anytime in the Unloan app.

[How to make changes to Autopay]

Jean’s repayment example

Jean’s repayments are due on the 20th of each month (shown as squares). She uses AutoPay to make sure her repayments (shown as triangles) are made on time.

Jean sets her fortnightly AutoPay to occur before her repayment is due, that way the funds are already in her account, ready for her repayment.

On July 2nd, a rate change was announced (shown as a circle). From that point, AutoPay payments in the next repayment period will adjust to reflect the new rate. These adjusted payments are held in Jean’s redraw until her next repayment is due.