The Rise of Interest Rates - What does this mean for you?
The RBA has lifted interest rates to control the high inflation and current economic conditions. This rise in inflation has been primarily influenced by contextual factors, including Russia’s invasion of Ukraine, lockdowns in China, and COVID-19-related labour shortages.
In order to manage higher inflation, interest rates have increased to control the excess demand, which can not be met by supply.
How will the increase in interest rates affect you? The increased cash rate directly impacts the interest rate on your home loan and the amount of interest being repaid per month.
Mortgage repayments are predicted to increase, which may affect how quickly you can pay off your home loan.
Thankfully, there are ways to ease the impact of these increasing interest rates and ensure you are able to pay off your home loan quicker than planned.
Switch from a variable to a fixed-rate loan
Before interest rates rise, it can be a good idea to switch to a fixed-rate home loan to lock in a lower rate before they rise. This can provide a sense of security and peace of mind, as your rate won't be affected by rising interest.
Make extra repayments with an offset account
Minimise your home loan and reduce the overall interest payable on your home loan by making extra repayments with an offset account.
Set a budget
Whether it's before or during a rise in interest rates, it's always a good idea to budget your expenses and have an understanding of where you are spending the majority of your money, so you can reallocate spending accordingly.
It's important to cut any unnecessary spending and avoid living beyond your means, as this will save you in the long run.
If you are concerned about how rate rises will impact your home loan repayments, reach out to our team of expert mortgage brokers here at Next Lend.
Our expert mortgage brokers can help you manage and prepare for interest rate rises and place you in a better financial position.
Here are some of the ways we can help:
We will assess your current financial situation in consideration of the rate rises and will help you find solutions that will improve your financial position.
We can direct you to a lender that works for you if your fixed term is ending and complete a pricing request to determine the best option.
Our access to a wide range of lenders means we can help you refinance to a lender that offers a competitive interest rate and fulfils your needs.
Our expert mortgage brokers negotiate with your lender on your behalf to secure a competitive deal.
We can show you options to determine which type of home loan is most suited to you, such as fixed or variable.
We are here to help consolidate debts to make them manageable.
We can help you make use of an offset account to lower the interest being paid.
Our professional mortgage brokers at Next Lend are here to help you with your financial needs and help you to achieve your financial goals.
If you are seeking financial guidance with your loans, please do not hesitate to contact us to learn more about how we can help you today.