Learn about RIC’s interest rates, including what they are based on and how and when they may change
What you will learn:
- The current interest rate on RIC loans
- How the interest rate is determined
- How and when RIC interest rates change
The current interest rate on RIC loans
All RIC loans have the same concessional variable interest rate. Check the RIC homepage for the current variable interest rate. RIC loans are 5 years interest only repayments and then 5 years principal and interest (P&I) for the remainder of the ten-year term. You can choose to make repayments monthly, quarterly or half yearly to best suit your cash flow, with payments deducted on the first business day of the chosen cycle.
How the interest rate is determined
RIC interest rates are reviewed in line with the 10-year Government Bond rate, including administrative costs. Government Bonds are financial tools issued by the government to raise money. Investors purchase these bonds, effectively ‘lending’ money to the government. In return, the government commits to pay back the original amount that was borrowed plus interest. Bond rates are the interest rates that the government pays to investors who purchase these bonds. These Bond rates can go up and down for many reasons, including economic conditions, inflation and government policies. RIC interest rates are determined by the Australian Government. RIC has no influence on the rate charged on loans and cannot negotiate lower interest rates for individual customers. The Australian Government does not make a profit on interest charged.
How and when RIC interest rates change
RIC has variable interest rates which means they are subject the change. The variable interest rate on RIC loans is reviewed every six months. They don’t necessarily change every six months, but if they do, changes will happen in February and August.
If you have questions about variable interest rate, contact us.