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Understanding Monthly Repayments and AutoPay
Understanding Monthly Repayments and AutoPay

Learn more about your monthly repayments and how AutoPay can help streamline them.

Updated over a week ago

Monthly repayments refer to the amount you are required to pay each month as part of your home loan contract. This could also be known as:

  • Minimum monthly repayments

  • Min. repayment

  • Required minimum repayment amount (RMRA)

  • Next Repayment

Your monthly repayment amount comprises of a principal amount and the interest charged. The principal amount is the amount of money from your bank or lender. The interest is the cost charged by the bank or lender to you to borrow this money. The interest rate on your home loan, the loan term and the amount of your repayments will determine how much you end up paying back over the life of the loan.

The Interest component is calculated based on your Total Loan balance. If you have funds in your redraw balance, it will offset some of your interest resulting in less interest charged for that repayment period. This is shown in the diagram below where the total monthly repayment reduces to $4900 as the customer owes $100 less interest than the previous repayment period after depositing funds into their redraw.

What is AutoPay?

AutoPay enables you to set up automatic direct debits to meet your monthly repayments. You have the flexibility to select weekly, fortnightly, or monthly frequencies and the option to pay either the minimum amount required or a higher amount. Although AutoPay is optional, it is a recommended way to ensure you stay on top of your home loan repayments. Learn how to set up Autopay.

How does it AutoPay work?

AutoPay payments remain in your Unloan redraw balance until the scheduled monthly repayment date. Learn more about a redraw facility and how it works

The illustration below demonstrates a scenario where a customer has opted for fortnightly AutoPay debits of $2,500 (represented as a triangles). These payments contribute to the growth of their redraw balance until the scheduled monthly repayment date (represented as squares).

How is AutoPay calculated?

The minimum AutoPay amount is calculated based on your outstanding balance and your current interest rate. It does not take into account any redraw balance that may be reducing the total loan balance (Total Loan Balance = outstanding balance minus redraw balance).

How can AutoPay help reduce my interest?

Selecting a weekly or fortnightly AutoPay frequency or doing one-off transfers into your Unloan account are ways to have funds contributing to your redraw balance before the required monthly repayment date, offsetting your interest charges.

By selecting a weekly or fortnightly AutoPay schedule or making one-off transfer to your redraw account before your scheduled monthly repayment date helps reduce the interest you accrue daily. Any funds in your redraw facility will reduce the balance owing on your home loan, which means you’ll pay less interest on your home loan! Learn more about our redraw feature

What happens if I don't set up AutoPay?

If you don’t have AutoPay set up, you will need to ensure you transfer funds into your Unloan home loan account to meet the monthly minimum repayment amount before or on your scheduled monthly repayment date.

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