Prepare for the rate change after an offer
An introductory rate can make the first period of a loan look more affordable, but the repayment after the offer ends may be the more useful planning number. Enter the loan amount, introductory rate and months, assumed revert rate and total loan term to see both phases on a principal-and-interest basis.
An advertised revert rate is not a guarantee of the future rate. Use a written product disclosure statement and quote to check the actual promotional period, fees, rate basis and conditions. The estimate is not a lending offer, affordability assessment or recommendation to choose a product.
How to read the results
Revert repayment is the calculated monthly principal-and-interest payment after the introductory period, using the balance remaining at that point and the shorter remaining term. Intro repayment is the first-phase monthly payment, calculated across the original total term.
Payment shock is the revert payment less the intro payment. Total interest and total cash cost cover both modelled phases. Fees, offset benefits, redraws, extra repayments, rate changes and the lender’s own rounding or repayment-date method are excluded.
Worked example
For a $500,000 loan over 30 years, the defaults use 5.49% for 12 months then 6.79%. The introductory repayment is $2,836 a month. After 12 months the projected balance is $493,252 and the revert repayment becomes $3,247 a month.
That is a modelled payment increase of $411 a month. Across the full two-rate schedule, total interest is about $663,877 and total cash cost about $1,163,877, assuming neither entered rate changes.
Assumptions and limitations
- Both the introductory and revert phases use principal-and-interest repayments.
- The introductory rate applies for the exact number of entered whole months.
- The revert repayment amortises the remaining balance over the remaining months.
- Each entered rate remains constant throughout its modelled phase.
- Fees, package discounts, offsets, redraws and extra repayments are excluded.
Frequently asked questions
Does the calculation assume the loan balance stays unchanged during the offer?
No. It models principal-and-interest payments during the introductory period, so the balance reduces before the revert payment is calculated, subject to the model’s monthly timing assumptions.
Can the introductory period equal the full loan term?
No. It must be shorter so there is a remaining period for the revert-rate calculation.
Is payment shock a lender fee?
No. It is simply the calculated difference between two monthly repayments under the entered rate assumptions; it does not include charges.
This calculator and supporting information provide general estimates only. They do not take account of every product rule, tax consequence or personal circumstance and are not financial, tax, credit or legal advice.