Is the interest rate on my home loan going to increase?

Mark Fitzpatrick | June 01, 2018

Difficult question to answer with any great certainty however most economist believe that this is going to happen whether we like it or not.

Many Australian home loan borrowers are used to record low-interest rates so is now the right time to prepare for what the economists are predicting. It might, may or could be a very smart move.

The way I see it is you should at least do your homework and speak to your mortgage broker or an industry professional.

Here are 3 things you need to should be considering:

1. Check the interest rate on your home loan. It is incredible to think that 70-80% of home loan borrowers don’t know the interest rate on their home loan

Once you know the rate, compare it with what is available in the marketplace. You might be surprised at how much money you could save.

2. Consider fixing......locking in an interest rate can make a lot of sense. Fixed home loans are very low right now and you can choose to fix your rate from 1-5 years. 

If you are not comfortable with fixing all of your loan, you could split the loan into what is known as a cocktail loan, part fixed, part variable. This gives you the flexibility of being able to pay as much as you can on the variable portion and the certainty of fixed repayment on the fixed rate portion.

3. Get smart by using the offset or redraw features on your loan. It’s a simple way to pay less. Round up your repayments, every extra dollar paid off your loan reduces the balance and trims the next month’s interest charge and helps pay off your home loan more quickly.

You can call me on 0410 442936 or simply ask me a question