Aged Care Costs to Ease Slightly from 1 October as Interest Rate Falls
From 1 October 2025, the interest rate used to calculate aged care accommodation payments – known as the Maximum Permissible Interest Rate (MPIR) – will fall to 7.61% per annum.
This rate applies to people entering residential aged care between 1 October and 31 December 2025, and it may influence how much you pay if you choose not to pay your full accommodation cost as a lump sum.
The MPIR is used to calculate the Daily Accommodation Payment (DAP) – the daily fee charged when you don’t pay the full Refundable Accommodation Deposit (RAD) upfront. A lower MPIR means a slightly lower daily cost for residents paying via the DAP or a combination of RAD and DAP.
For example, on a $500,000 RAD, the DAP at the new rate of 7.61% will be approximately $104.25 per day, compared to $106.53 per day under the current rate of 7.78%.
While the difference may seem small, it can add up over time – especially for those paying entirely via the DAP.
It’s important to know that the MPIR is locked in when you enter care, so if you move in after 1 October, you’ll benefit from this lower rate for the duration of your stay (unless you restructure your accommodation payments later).
If you or a loved one is planning to enter aged care later this year, now is a good time to discuss your options and understand how this change could affect your accommodation costs.
