Recently, the RBA increased interest rates and it appears that more interest rate increases are to come. We know that rising interest rates can increase financial pressure and make navigating your loan and repayments feel stressful and overwhelming. With the holidays just around the corner, many families will be feeling the pressure and looking for ways to get ahead and free up cash for holiday spending and activities.
At SW Brokerage we are dedicated to supporting you through these difficult times so that you can stay on track with your mortgage, budget your finances, free up cash flow, and ultimately reach your financial goals.
Here are a few things to keep in mind when it comes to responding to interest rate rises:
1. You can do this.
Firstly, it’s good to remember that your lender wouldn’t have approved your mortgage unless it was convinced you could cope with interest rate rises. So, unless your financial situation has since changed, you should be able to manage interest rate rises if not with a bit of help from your lender or myself.
2. Get ahead of any problems.
If you think you might struggle to keep up with your repayments, speak to your lender or contact me to discuss your options. Be sure to make contact before you miss a repayment. The more warning you give your lender, the more flexible they are likely to be.
3. Budget for rate rises.
A great way to budget for these rate increases is to assume your mortgage rate will rise by 1 or 2 percentage points. Calculate what your new monthly repayment would be and start paying it now. You can put the extra money into an offset account, a redraw facility, or a special savings account. Schedule an appointment with me to discuss how I can help you manage your budget. You can also jump onto our website and use our Loan Repayment Calculator.
4. Improve your savings rate.
Look for ways to increase your income and reduce your expenses. Check out our latest blog on Cash Flow to learn more about how you can review your budget and make changes to increase your savings rate and cash flow for day-to-day living.
5. Switch to a better loan.
The home loan market is intensely competitive, which is why lenders often charge new borrowers lower interest rates than loyal customers. As a borrower, you hold more power than you think. You can negotiate a better rate with your bank or speak to me about refinancing your loan. At SW Brokerage we have access to over 60 plus lenders offering a range of loan options.
Contact us here at SW Brokerage and speak to one of our financial specialist to find out how we can help you get ahead and successfully manage increasing interest rates