How Do Interest Rates Work?
"Compounding interest is the eigth wonder of the world" - Albert Einstein
Albert Einstein once called compounding interest "the eigth wonder of the world" - so how should us mere mortals expect to understand it's complexities. That is where we come in. Through our series of informative interest rate comparison articles, we hope to educate in a no nonsense way that enlightens, with humour, on the mystery that is interest.
InterestRateComparison.com.au is here to provide people like you with an informative and easy to understand comparison of many different types of interest rates as they change, and explain how you can make the most of your money, benefit from the many credit card offers out there, or simplify payments by consolidating personal loans and credit card payments.
Mortgage rates tend to closely follow the official Reserve Bank Cash Rate with some exceptions. The banks are not actually oblidged to drop interest rates when the Cash Rate drops, but they most often do pass on the full saving. They almost definitely pass on any increase.
Everyone knows that you can save money by paying off your mortgage earlier because you save on interest payments. But does this necessarily mean that you have to pay off more with each mortgage payment? This isn't always the case.
Another fantastic resource is World Interest Rates where you can see what the rest of the worlds interest rates are doing in comparison with one another. Of course this isnt a measure of the cost of living in each country or region mentioned, so if you see an incredibly low interest rate, it doesn't necessarily mean that it is cheaper to live on the whole.