With interest rates dominating dinner time conversations across the country, following the RBA’s latest cash rate hike to it’s current level of 3.85% (the highest it’s been since 2012), borrowers in Perth and indeed across the country are keen to understand what they can do to keep their mortgage repayments as low as possible. 

With no certain end to the interest rate hikes in sight, and some lenders even increasing their variable rates out of cycle, a lot of our Perth home loan clients are starting to ask when will interest rates come down? A sure sign that this aggressive upward trend is starting to hit household budgets. 

If you have a variable rate home loan, your interest rate is likely to have increased in line with the seemingly constant increases by the RBA over the past 11 months. And if you’re among the veritable hoards of mortgage holders set to come out of your fixed rate loan this year, you’d be keeping a keen eye on how things are tracking too. While the lenders are predicting the rate rises will start to slow down throughout the remainder of the year, we are expecting the mortgage industry to be extremely competitive and now, more than ever, it’s crucial to be working with an experienced mortgage broker who can really look for the best interest rate for you and keep your repayments in check. 

If you’re concerned about the impact of interest rate rises, we’ve put together a few ideas to mitigate or minimise the impact on your monthly budget. 

Refinance your mortgage

If you have a fixed-rate mortgage, your interest rates will remain the same for the length of your loan. If you have a variable-rate mortgage, your interest rate will increase as the cash rate rises. This means that your monthly repayments will increase. At Base Home Loans, we conducts regular rate reviews for our clients to ensure they are always getting a great rate, but you can initiate this process with us at any time. If you are keen, however, to lock in your rate for a set time so you can enjoy the relative security of knowing what your repayments will be each month, you can switch to a fixed rate loan. As usual, this will depend on your unique circumstances, so speak to us about what your best home loan option might be. 

Make extra Interest Rates payments on your mortgage

If you can afford to, it might be a good option to consider making regular extra loan repayments on your mortgage. This will decrease the amount you are paying interest on, so over-time your repayments should start to decrease. It will also mean you have more equity in your property that you can access if you need to. Once again, this is where a mortgage broker can come in handy when you’re looking for a home loan to suit your needs, as some don’t allow this feature. 

Consider extra income sources 

Do you have space on your property that you could rent out? Or perhaps you could consider installing a granny flat or garden studio that could be used to generate rental income. With a rental crisis literally happening in every state across the country, you could use this extra income to cover the increasing costs of your own mortgage, whilst adding value to your property overall. 

Talk to your lender

If all of the above options are not going to help right now and you’re struggling to repay your mortgage, your best options is to be honest and upfront with your lender early on before things get out of control.  They may be able to offer you a payment holiday or another solution until things get back on track.

If you are looking to refinance your home loan, our Perth mortgage brokers are qualified to find you a lower interest rate. If you’re ready to talk, we’d love to hear from you. 

All lending subject to status and lenders criteria. Terms & conditions apply. This document contains general information only. Your own personal circumstances have not been considered and you should seek independent financial advice prior to making any decision on a financial product.

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