Chris Hientz, is one of our Senior Brokers, with over 15 years of banking residential and commercial lending experience under his belt. Recently Chris wrote this article to some of his clients and referrers, and one I would like to share with you, as Chris provides some very simple but effective tips in keeping a check on your mortgage and business interest rates.
The average variable home loan rate between 1959 and now is more than 8 per cent and Baby Boomers would remember rates hitting such heights as 17 per cent in the early 1990’s. Younger Australians however, have been in a low interest environment now for more than four years and any shift may come as a shock, so here is how to prepare:
Adjust your goals
Ask yourself how many rate rises would impact your money goals such as renovations and holidays. Online calculators can help you crunch the numbers.
Shop around for better deals
If your home loan isn’t charging a competitive rate now, you’ll be left even more out of pocket if rates climb higher.
It’s worth thinking about locking in a fixed-rate portion of your loan. Look for a fixed loan that allows extra repayments so you can whittle down the balance sooner.
Pay more now
Making extra repayments or paying a lump sum while rates are still at record lows, helps pay off the loan sooner and minimises the impact of possible future rate rises. Loans with offset or redraw facilities also provide you the peace of mind to access that extra money, if you need.
Ditch other debt
If interest rates head north, expect to pay more on personal loans and credit cards. If you have an outstanding credit card balance, try chiselling away at the debt today.
We look forward to helping you with your review by contacting us on 1300 141 453 or visiting our website www.aapfb.com