Millions of Australian homeowners who have a variable rate home loan will experience an increase in their monthly mortgage repayments due to The Reserve Banks’ interest rate hike in recent months.
While the cost of living continues to increase and income remains unchanged in most industries, a lot of homeowners feel uncertain about the future of their loan repayments.
Here are a few tips which can be helpful to cope with rising interest rates.
1- BUILD YOUR BUFFER
To avoid any future financial hardship/stress, make sure you’ve got plenty of savings to weather the storm which can get worse. You can also do this by putting aside money into your offset accounts.
2- FIXING YOUR MORTGAGE
If your interest rate is variable, you might want to consider fixing it (usually 1 to 5 years). This can provide stability & peace of mind in a potentially turbulent time.
3- MAKE EXTRA REPAYMENTS
It’s the interest rate that’s rising & not the principal so by making large lump sum payments, you can reduce the amount of interest you’re being charged.
4- REFINANCE
Seek professional credit advise to see if it’s a good idea to switch banks. Refinancing can lower interest repayments, reduce your loan term and add additional features to your home loan and the ability to access equity.
5- BUDGETING & CUTTING COSTS
Save more, spend less. Cut the cost of spending. Pay off high interest debts such as credit cards & most importantly SEEK PROFESSIONAL FINANCIAL ADVISE!
If you need professional credit advise or help with your home loan, We can Help!
Get in touch for a free mortgage and finance review.
If you’re experiencing financial hardship, you can contact your lender’s financial hardship hotline for professional credit advise or help with your home loan. We can Help! Get in touch for a free mortgage and finance review.
The content on this site is for informational and educational purposes only and is not intended as a substitute for professional credit or financial advice. Always consult with a licensed financial advisor/finance & mortgage professional before making any decisions based on the information you read on this blog.