Adjustable home loan repayment options

When interest rates go up or down, how does it impact my home loan?

Owning your happy nest is a lifelong dream. One which represents a significant financial commitment. A mortgage makes it easier for you to build your house or to renovate your existing home, for example, to improve the appeal or practicality.

In return, you repay your loan in Equated Monthly Installment (EMI) over a specific period. A home loan tenure can last up to 35 years, which means that the situation may change over time and alter your EMI. The latter can increase or decrease depending on many factors, including changes in Key Rate (previously known as Key Repo Rate) by the Central Bank or if you choose a part payment to reduce your loan tenure/amount depending on your financial health.

In 2022, following successive increases in the Key Rate, lenders, including banks and other financial institutions, have subsequently reviewed their interest rates upwards on credit facilities (loan, overdrafts, credit cards…).

Let’s explore how the changes in interest rates may impact your loan. This will help you manage your mortgage over the long-term and plan for any unforeseen circumstances.

Types of interest rates linked to loans

The one factor that is beyond is the interest rates. There are two types of interest rates: floating and fixed. While floating interest rates cater for any changes in interest rates and adjust your monthly repayments automatically, fixed interest rates means that your monthly repayments will stay the same during the entire loan period, irrespective of any change in Key Rate.

If you have taken a mortgage with Bank One as from 15 December 2022, a floating interest rate is part of your loan agreement, which is good news! This way, you will not end up paying a higher overall loan amount over your loan tenure. Refer to below FAQ on residual amount/balloon payment.

If you have taken a loan prior to this period, we highly recommend that you get in touch with your Branch Manager or Relationship Manager to discuss about our adjustable monthly repayment or any option/s that will suit your current financial situation.

Amortization schedule - Floating v/s Fixed EMI

Current Interest rate (in percentage)

Actual loan balance

Remaining period (IN YEARS)

Monthly instalment

Disclaimers: The information, which you calculate from this simulator, is intended for use by you as a guide only; it is not an offer and has no legal effect. Bank One accepts no responsibility for any losses arising from any use of or reliance upon any calculations or conclusions reached using the calculator.