 Loan fee versus lower-rate calculatorhttps://ratepool.com.au/calculators/loan-fee-vs-rate Explore another scenario |
Loan fee versus lower-rate calculatorhttps://ratepool.com.au/calculators/loan-fee-vs-rate Explore another scenario |
See whether a lower interest rate is enough to recover an annual package fee.
Compare a loan with no annual package fee against a lower-rate package loan. The starting figures are an example.
$8,547.42estimated lower cost with the package loan over 25 years
No-fee repayment$3,282.91
Package repayment$3,221.51
Positive differences favour the package loan. Both rates are held constant for the entered term.
$197,618.93
$302,381.07 above break-evenBased on the entered loan balance of $500,000.00.
Approximate starting balance needed for first-year interest savings to cover one annual package fee.
This matters if you may refinance, sell or change packages before the full loan term.
| After | No-fee loan interest | Package loan interest | Package fees | Package difference |
|---|---|---|---|---|
| 1 year | $30,757.29 | $29,757.89 | $395.00 | $604.40 less |
| 3 years | $90,583.66 | $87,592.97 | $1,185.00 | $1,805.70 less |
| 5 years | $147,913.41 | $142,950.83 | $1,975.00 | $2,987.59 less |
| 10 years | $278,050.12 | $268,340.61 | $3,950.00 | $5,759.51 less |
| 25 years | $484,873.34 | $466,450.93 | $9,875.00 | $8,547.42 less |
Across the full entered term, the lower rate saves an estimated $18,422.42 in interest. Spread evenly across 25 years, that is approximately $736.90 a year.
This is a simple average, not a fee quote or a forecast of future value.
We calculate separate monthly principal-and-interest schedules for the same loan balance and remaining term. The no-fee option uses the first rate. The package option uses the package rate and adds the annual fee once for every entered year.
Net benefit is the no-fee loan's interest minus the package loan's interest and annual fees. The first-year break-even balance is where the estimated first-year interest reduction equals one annual fee. It excludes upfront fees, discounts on other products, offset benefits, rate changes and the time value of money. Check package conditions and current rates with the lender.
The same rate reduction saves more interest on a larger balance. A package fee may pay for itself on one loan and cost more on another, even when the advertised rates are identical.
A full-term result can overstate the benefit if you refinance, sell or change packages sooner. Use the shorter time horizons and check every included product and condition.
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