The Reserve Bank has said it will increase the cash rate at some point. When that happens, banks generally raise their mortgage rates and pass the rise over to consumers. So what can you do to prepare?
5 tips to help you prepare
1) Calculate your possible repayment increase
If your home loan rose by anywhere from 0.25 percentage points to 1.50 percentage points in the years ahead, what would this mean for your repayments?
Prepare for a rainy day and get ahead on your mortgage payments
If you can afford to make additional payments at the lower interest rate, less of your loan will need to be repaid if a rate rises occurs. Being ahead can also give you some breathing space whilst you plan your budget and where those additional funds will come from.
Increase your savings
Rate increase or not, having a buffer in your savings you can draw from means you are not left financially stressed when there is an unexpected expense or a rate rise.
Consider refinancing
You may consider locking in a fixed rate, splitting your loan facility or restructuring your loan to have new features such as an offset account or draw-down facility. We recommend reviewing your loan every 3-years helps to ensure you are on a competitive interest rate and make sure that you have the most suitable structure as your lifestyle needs change.
Book in a chat with our team if you would like to review your options or loan structure.
Disclaimer:
Terms are subject to approved persons only. This information is true and correct as of 23/02/2022. All of the content above is general in nature and may not suit your personal needs, situation objective & goals.
