Understanding Interest

Understanding interest rates is an important first step if you want to pay off your home loan quickly.

How your interest is calculated

We calculate the interest you owe daily. These calculations are based on the balance of the loan at the end of each business day. That means that the balance on a Friday is the amount used to calculate the interest for the following Saturday and Sunday. It also means that the balance on the business day before a public holiday is used to calculate the interest during the holiday.

When your interest is charged

These individual daily calculations are added up and processed to your loan account on the same day of the month that your loan settled.

Why your interest charges will vary

Sometimes the date falls on a weekend or a public holiday. When this happens we’ll post your interest calculation to your account on the next business day.

Variations in your interest charges occur because not all months are the same length. You may be paying interest on as few as 28 days or up to 34 days. This depends on when weekends and public holidays fall.

Where the Line of Credit fits in

Your Direct Credit Line of Credit has an anniversary of the 15th of every month. This is when a statement is produced and mailed to your postal address. The statement shows you the amount of payment required and then this exact amount is taken on the second banking day of the following month.

What to do if you’re still not sure

If you’re still not sure, get a copy of your latest statement and call the Direct Credit Customer Service team on 1800 000 800. They’ll be glad to guide you through your statement and clarify any questions you may have.

Principle & Interest Loan

This is the most common and popular loan in the marketplace today. The standard loan term is usually between 20 and 30 years. Features of these types of loan usually include:

  • Variable repayment options
  • Salary Crediting
  • Free Redraw
  • Split loan ability which allows part of the loan amount to be   fixed and part to remain variable, up to 4 splits
  • Loan portability which allows borrowers to sell their house and buy another without finishing their current home loan and starting another

Interest Only Loan

Some people prefer to minimise their repayments on a home loan, so choose only to make the interest only portion of their repayments. These loans, Interest only are typically used by people who are either in business and wish to maximise their cash flow on hand, or by investors who wish to buy investment properties, and use negative gearing options.

While interest-only repayments mean you may never own the house while only making interest-only repayments, the loans revert to principle and interest generally after 10 years.

Lines of credit interest only can be up to 15yr terms.

Please contact Direct Credit Homeloans Australia today and ask us about our Interest only home loans.


1800 000 800 Australian Credit License Number 392727