- In a one year period, there are 52.18 weeks and 26.09 fortnights.
- The loan interest rate per repayment period is determined by dividing the nominal rate per annum by the number of repayments in one year.
- Loan payments, both initial and ongoing, are rounded to the nearer cent before calculation of the comparison rate and the total amount repayable.
- The comparison rate is rounded to the nearest one hundredth of 1% per annum which is the accuracy required by the Regulations.
- The calculator converts the loan term into a number of repayment periods. If the answer is not integral, the loan term is truncated to the next lower whole number of repayment periods. For example, for loan term 25 years and repayment frequency weekly, the number of repayment periods is calculated as 1,304 (ie. the integral component of 25 x 52.18 = 1,304.5).
- If the frequency of ongoing fees is less often than repayment frequency and the final ongoing fee is to cover a period shorter than its normal length, then the final ongoing fee will be reduced to the appropriate proportion of the normal full fee. For example, using the same example as in point 5 above, the loan term has been reduced from a full 25 years by 0.5 weeks to 1,304 weeks. If the ongoing fee is $100 per annum payable in arrears, while the repayments are weekly, then the final 25th fee will be reduced from $100 to $99.04. This proportion is calculated as (52.18 - 0.5) / 52.18 to adjust for the 0.5 weeks truncated from the original nominated term of 25 years.
|
