In the world of consumer finance, it often seems as if every product has some sort of interest rate attached to it. These rates denote either how much the product will cost you, or how much you can earn from it.

But, just how important are interest rates, really? The answer: very.

Interest Can Make a Big Impact on Your Budget

Whether you have a loan product or a savings or investment account, the interest rate matters, and even small changes in interest rates can have big impacts.

For example, a $100,000, 30-year mortgage loan with a 5% interest rate will cost over $90,000 in total interest over the life of the loan. A loan of the same size and term length with a 3% interest rate would cost less than $52,000 in interest over the 30-year period.

And the same is true for accounts that earn interest, rather than charge it. A $5,000 three-year term deposit, for instance, may yield only $305 at 2% interest, but can earn around $620 at 4%.

Interest Rates Affect Your Monthly Payments

Of course, you don't need to crunch the numbers for an entire loan to see the impacts of interest rates on your budget. Together with your principal amount and term length, your interest rate will be a major factor in the size of your monthly payments for most credit products.

Consider a $10,000 personal loan with a 10-year term. With an interest rate of 5%, the monthly payment would be around $105. The same loan with an interest rate of 10% would cost $132 a month (and twice the total interest).

Choose the Right Bank for the Best Rates

In the end, the interest rate associated with a specific financial product can have huge impacts on whether it is a good choice or the right fit for your budget.

That's why many consumers turn to Auswide Bank for their financial needs. Auswide Banks are known worldwide for their market-leading financial products that help Australian consumers make the most of their money, be it for an affordable mortgage loan or a competitive savings account.

Author: Brittney Mayer, Contributing Editor for and