How To Manage Rising Interest Rates
If the prospect of rising interest rates leaves you feeling slightly uneasy, there’s never been a better time to make an appointment with a mortgage broker.
As a general rule, what goes up must come down – but in the case of rising interest rates, it’s the opposite that applies. After remaining at record breaking lows during the peak of the pandemic, the Reserve Bank Of Australia has released two consecutive increases to the cash rate in the last quarter, and have also indicated that they will be the first of many.
Unfortunately, what that means for most ordinary Australians with a home loan increased pressure on their finances. In fact, forecasts from the ASX predict some pretty hefty increases to the cash rate by the end of 2023. These predictions factor in an increase in the Reserve Bank’s cash rate from 0.10% to 3.5% by June 2023, which is enough to push up the standard variable mortgage rate from around 2.25% to 5.65%.
Thankfully, homeowners don’t have to go it alone when it comes to navigating rising interest rates, as there’s an industry professional who has the time, experience and knowledge to guide you on how to best approach these changes: your mortgage broker.
Four Ways Your Broker Can Help With Interest Rates
So far in 2022, it’s been mortgage brokers – not banks – that have written over two thirds of Aussie home loans. However, many people make the mistake of assuming that mortgage brokers can only help with acquiring a new home loan. In reality, a good mortgage broker will actually aim to stay with their client over the entire lifetime of their loan, as their services don’t expire once you’ve signed the contract of sale.
For many Australians, rising interest rates means increased repayments on mortgages, loans and credit cards. With less disposable income, many people may need to tighten their belts.
Interest rate rises can be tough for families and small businesses, as increased mortgage and debt repayments can make day to day life more expensive. Thankfully, here’s how your mortgage broker can help you combat the effects of rising interest rates.
Home Loan Health Check – Before making any big financial decisions based around rising interest rates and how to budget for them, take a trip to your local mortgage broker to assess the current state of your home loan. They will see what can be done to improve the terms and conditions, particularly if your personal circumstances have changed.
Discuss Loan Structures – While rising interest rates may be at the forefront of any trip to see your mortgage broker, they generally help clients to explore all of their options for the long term, as opposed to jumping ship to the cheapest offer. This could even mean swapping to a fixed rate for security, or swapping to variable rates to access an offset account.
Explore Refinancing Options – Refinancing refers to the process of paying out your current home loan by taking out a new loan. While this can be with the same lender, it is also common to change to an entirely different lending provider for a better interest rate, lower fees or more favourable loan terms based on your situation.
Provide Stress Relief – Above all, it’s important to remember that as a consumer, you have nothing to lose by having a chat to your local mortgage broker. As financial industry professionals, they’re experts on navigating home loans, and can provide guidance on helping ordinary Australians make savvy financial decisions for the long term.
If you’re feeling the pinch of financial stress at the moment, you’re not alone. With interest rates and inflation only set to increase, there’s never been a better time to be proactive and get in touch with your local mortgage broker – but where do you find one?
Partnering With Home Loan Professionals
Navigating the complex world of home loans has long been regarded as stressful, frustrating and time consuming – but if you can find the right advice on sourcing how mortgages work, then the good news is that it doesn’t have to be.
Since their inception in 2012, the team at Madd Loans have worked tirelessly in providing over 2,000 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, owner George Samios takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it.
If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.