The Reserve Bank has said it will increase the cash rate at some point. When that happens, banks will almost certainly raise their mortgage rates. So what can you do to prepare?
Here are five tips:
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Calculate by how much your repayments would increase if your home loan rose by anywhere from 0.25 percentage points to 1.50 percentage points in the years ahead
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Get ahead on your mortgage now, so less of your loan needs to be repaid if and when those rate rises occur
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Increase your saving rate, so you’re covered if your monthly repayments increase
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Contact your lender today to ask for a rate cut – if you threaten to switch to another lender, there’s a good chance your lender will agree to your request
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Think about refinancing from a variable-rate loan to a fixed-rate loan
Give me a call if you want to discuss how a rate rise might affect your individual situation.