Interest rate
5 Interest rate
The initial interest rate payable by an applicant is the base lending rate when the applicant first draws down the loan or part of the loan.
The initial interest rate for the loan—
depends on whether the applicant decides to have the interest rate fixed for 1, 3 or 5 years when the applicant first draws down the loan or part of the loan; and
is worked out by the authority based on the base lending rate when the interest rate is fixed.
At any time during the term of the loan after any period decided under subsection (2)(a), the authority may agree to fix the interest rate for periods of 1, 3 or 5 years.
The authority may, during the term of the loan, increase the interest rate to a commercial rate if the authority is satisfied the applicant’s financial capacity has improved.
If, under subsection (4), the authority decides to increase the interest rate because the applicant’s financial capacity improves during the term of the loan, the authority may decide the extent to which the interest rate for the loan is to increase—
in an annual review of the loan; and
based on the improvement.
The authority may decide the extent to which the interest rate is to increase under subsection (5) more than once in relation to the applicant.
In this section—
base lending rate means the 1, 3 or 5 year lending rate, as appropriate, of the Queensland Treasury Corporation, plus a margin decided by the authority and approved by the Minister.
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