7Median interest rate

7 Median interest rate

(1) For the purposes of section 53 of the Act, this section sets out the method for working out an interest rate for a monthly authorisation period for the purposes of paragraph (a) of the definition of median interest rate in subsection 53(2) of the Act. Step 1 (2) List and number, in ascending order of value, the monthly interest rates published by Canstar in relation to owner‑occupier standard variable home loans offered by lending institutions in Australia, at the authorisation day. (3) If an interest rate of the same value is offered by more than one lending institution, list those institutions in alphabetical order. Step 2 (4) If the list compiled under step 1 contains an odd number of entries, determine the interest rate that is, numerically, the middle of the list.

Note: Example: If a list contains 11 entries, the interest rate in the sixth entry in the list would be determined.

(5) If the list compiled under step 1 contains an even number of entries: (a) identify the 2 interest rates that are either side of the numerical middle of the list; and (b) calculate the sum of the 2 interest rates identified under paragraph (a); and (c) divide the sum calculated under paragraph (b) by 2.

Note: Example: A list contains 12 entries. The interest rate in the sixth entry is 4.6%. The interest rate in the seventh entry is 4.8%. The interest rate identified under step 2 would be 4.6% + 4.8% = 9.4%. Divide this sum by 2. The interest rate determined is 4.7%.

(6) The result in step 2 is the interest rate for the purposes of paragraph (a) of the definition of median interest rate in subsection 53(2) of the Act for the monthly authorisation period.