Mortgage rate change calculator: what a rise actually costs you

Why does the monthly figure understate it?

A bank will tell you that a half-point rise adds a certain amount to your monthly repayment. That number is correct and it is also the smallest true thing that can be said about the change.

On a $500,000 balance at 6% with 22 years left, half a percentage point adds about $149 a month. Most households can find $149. The same change costs about $39,400 over the remaining term, and that is a different conversation entirely. Both numbers describe the same event; only one of them makes the decision obvious.

So this shows both, for every step from a cut of 0.25% through a rise of 1.5%, using your own balance and term.

What cancels the rise?

The question nobody answers. If your rate goes up and you want your loan to finish on the same date it was going to finish, how much more do you have to pay?

That number is usually smaller than the total interest figure suggests, because the extra goes entirely to principal rather than to interest. It is worked out for each scenario below, and it is the part of this page that is actually actionable rather than merely alarming.

What this cannot tell you

It assumes the new rate then holds. Real rates move repeatedly, so treat each row as the cost of that rate persisting rather than a forecast.

It assumes your minimum repayment is recalculated. Most lenders raise the required payment when the rate rises, but some hold the payment and extend the term instead, which changes the shape of the outcome entirely. Your loan contract says which.

A fixed rate does not move until the fixed period ends. If you are fixed, the relevant question is what the rate will be when you roll off, not what happens today.

And no fees. Rate changes sometimes arrive alongside product or fee changes, and none of that is modelled here.

Common questions

What happens to my mortgage if interest rates go up 0.5%?

Your minimum repayment rises, and the amount depends on your balance and how long you have left. Enter your own figures above and the table shows the change per payment and over the whole remaining term. The second number is usually the surprising one.

How much does 1% cost me over the life of the loan?

Far more than twelve times the monthly change, because the extra interest compounds against a balance that now falls more slowly. The table above gives the figure for your loan rather than a general example.

What if rates fall instead?

The cut rows show what you get back. Worth knowing that if your lender reduces your required repayment when rates fall, keeping the old payment instead is one of the least painful ways to shorten a loan, since you were already living on that amount.

Why are fortnightly repayments not just half the monthly one?

Because there are 26 fortnights in a year and only 24 half-months. Paying half your monthly amount every fortnight means you pay the equivalent of 13 monthly payments a year rather than 12, which shortens the loan noticeably. That is a real effect and not a trick.

Should I fix my rate to avoid this?

This page states no view on that. What it can tell you is the cost of the rise you are trying to avoid, which is one input into that decision. A fixed rate also carries break costs if you repay early, and those can be substantial.

This is a model, not a prediction. It works out the repayment and total interest at each rate using standard amortisation on your balance and remaining term, and assumes the required repayment is recalculated when the rate changes. It cannot predict interest rates, and it does not model fees, fixed-rate periods, break costs, offset balances or redraw. It is not intended to be your only source of information when making a financial decision, and you may want to consider advice from a licensed adviser. Every figure above is yours to change.