Interest rates are on the rise

This week, the RBA Board has decided to raise the cash rate for the second month in a row and for the second time in almost 12 years. It has been increased by 50 basis points and is now sitting at 0.85%.

What does this mean for homeowners?

• In short, loan repayments will increase. The ‘big 4’ banks have announced they will pass on the rise in interest rates which means repayments will increase.
• For many of our clients this will be the first-time interest rates have increased since having a home loan.
• Those with a fixed loan or partial fixed won’t see a change in interest rates until their fix term has ended.

What can you do?

• Speak to your mortgage broker. Your broker can look at how your lender is responding to the change in cash rate and assess whether your current loan is still meeting your needs. If you’re looking for a great broker, we highly suggest contacting Sean from MoneyQuest Croydon.
• Review your budget. Can you save money elsewhere and put this towards your home loan?
• Prepare for future increases. If rates continue to rise (as predicted) using a home loan calculator will help determine what your payments may rise to which will help you plan.
• Book an updated appraisal for your property. Understanding what your property is currently worth in today’s market can help you make informed decisions and assist in planning for the future.