By the start of the 2022/23 financial year, Australia’s inflation rate reached 6.1%, the fastest annual increase since 2001. And as a result, the Reserve Bank of Australia decided to increase the cash rate in order to curb inflation. The RBA started increasing the cash rate in early 2022 for the first time in over a decade, impacting millions of Australian home owners.
There are steps you can take to reduce your interest rate and fees associated with your home loans.
- If you think your home loan interest rate is higher than other rates available in the market, the first you can do is to get in touch with your lender or your finance professional and request and conduct a home loan health check. In some cases, lenders do a pricing and give you an interest rate discount.
- Another way of reducing your interest rate is to make extra lump sum payments to reduce the principal.
- Having an offset or redraw account and depositing your savings into those accounts could also reduce your interest rate.
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