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Why you need to know your interest rate

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Interest rates are a big factor in each repayment and the total cost over the life of a loan, so staying on top of your current rate as well as the interest trends across the market is essential.
Read time: 2 minutes

By staying on top of interest rates, borrowers can make informed decisions about choosing a first-time home loan or getting a better rate by refinancing.

Interest rate percentages are based on a number of factors: the Reserve Bank, the cost of money on overseas markets and the general state of the economy. Interest rates don’t appear to move by much when looked at as a simple number, sometimes only a fraction of a per cent (referred to as a basis point, which is equal to 0.01%), but each basis point makes a significant difference to the total cost of a loan and makes a big difference when you’re working to pay down your mortgage.

When you first lock in a home loan, you will choose a fixed or variable interest rate. A fixed rate does not change over a set period of time, and your payments will be predictable each pay cycle. On the other hand, a variable rate is attached to the market interest rate and will move up and down with the market.

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