Interest Only repayment changes

From 23 May 2016, we’re changing the way your interest only monthly repayments are charged to align to industry standard. The new interest repayment methodology will calculate interest daily on the outstanding balance for that day and charge it monthly, based on the number of days in that particular month. Repayments will continue to be monthly and the total annual interest paid remains the same.

Detail on these changes has been sent to you by post, but more information about these changes is available below, including examples and frequently asked questions.

An example of how the monthly repayment calculation (excluding any fees & charges) could work is:

Example	Loan amount	Interest rate	Monthly Interest Charged calculation	Monthly Interest charged $ amount	Annual Interest Charged
Current monthly repayment calculation *Until 22 May 2016*	$100,000	5% p.a.	Annual interest divided by 12	Feb (29 days) = $416.67 Mar (31 days) = $416.67	$5,000
New monthly repayment calculation *From 23 May 2016*	$100,000	5% p.a.	Annual interest divided by 365 multiplied by the number of days in the month	Feb (29 days) = $397.26 Mar (31 days) = $424.66	$5,000

Frequently Asked Questions

What has changed?
- Currently you pay a set amount each month as we have calculated 12 equal monthly repayment amounts that do not vary due to the number of days in the specific month.
- The new interest repayment calculation will calculate interest daily on the outstanding balance for that day and charge it monthly. You will be charged interest on the outstanding balance for the number of days in that particular month plus any applicable fees and charges.
- There is no change to your Payment cycle, Next Payment Date or Remaining Contract Term. It is only the way the monthly repayment amount is calculated that will change.
Why are we making this change?
Is this change a positive or negative for your home loan repayments?
This is a positive change as it means:
- The Interest Only repayment calculation is easier for you to understand.
- You are provided with an Interest Only repayment methodology that is in line with Industry standards.
Why are we recommending you to use direct debits for automated payments?
How can you find out what your next monthly repayment will be?
- After your first payment from 23 May 2016, you can access your Internet Banking and Mobile Banking to check your indicative repayment amount for the following month, just as you can today.
- The indicative payment figure is based on the number of days in the coming month and the current loan and offset balance (so can vary if the loan or offset account balances fluctuate during that particular month)
Are there any changes to Principal and Interest repayments?

Important information

BankSA – A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.