The potential risk of financial hardship should interest rates rise
The Reserve Bank of Australia have signalled that interest rates are likely to rise within the next three years due to inflation. Thousands of Australians will potentially be vulnerable to rate rises due to the financial impacts of COVID-19. Whilst we are very fortunate here in WA, over the past 18 months, many less fortunate have seen their financial reserves drained.
Regardless of whether borrowers feel vulnerable to a rate rise, they should be negotiating their current rate. If you are looking to buy for the first time, fixing or part fixing your home loan is another way to safeguard against future rate rises.
With rates at all-time lows and a rising number of cash back offers, now is a great time to be saving money on your home loan. Mortgage holders must take advantage of this current situation. Those who have older home loans should be asking for better rates as there is a good chance you are paying more than you should. With such high competition in the market, banks are offering better deals left right and centre. Often you will be paying more than their newer customers, so comparing lenders can save you thousands of dollars a year.
A handy tip for current Borrowers is to be making repayments to support a higher interest rate. This will assist with monthly cashflow planning and have the added benefit of getting you ahead in your home loan repayments.
Despite the current situation, there are still stimulus payments and options available to, so make the most of what is applicable to you. Contact me today to see what you are eligible for.