Given there is lots of chatter at the moment about rising interest rates, we want to share some helpful tips around planning and budgeting for a higher rate!
The 6 things below can help you to reduce financial pressure right now AND plan for the future:
1. Don’t panic! This will be a time of adjustment. You are in control if you are planning for this.
2. Do your homework. Research how much your extra repayments might be and plan accordingly. Use our Home Loan Repayment Calculator which allows you to calculate how much it will be and identify how much you will need to save. We suggest working on what your current rate is and increasing it by 1.5% – 2% and budgeting for that. For example if your current rate is 2.09% work on a rate of 3.59% and budget for that loan repayment. Start paying this now so you accrue advance repayments and give yourself a buffer for the future.
3. Review your loan. Ask your bank or mortgage broker for a rate review because you are considering switching. Get their “best and final offer”.
4. Get a better deal. If you are not happy with your existing lenders offer, consider refinancing to a better rate. Some banks will offer you $4,000 cash back to switch. You should speak with a mortgage broker to ensure you can secure the best loan for your circumstances.
5. Restructure. Consider fixing your loan, changing the interest type or reducing the principal via an additional repayment. The goal is to have as much cost certainty as possible in these changing times. Your lender or mortgage broker can guide you through your options.
6. Tighten your belt. Look for ways to reduce your spending in other areas of your budget, for example by reviewing your insurances, your streaming services, or your power supplier. Check out our Budget Planner to get things back on track.
If you need someone in your corner to help you understand your options to reach your finance goals, contact Cass today. She will guide you on the best next steps to take.
1300 100 262 or firstname.lastname@example.org