Homeowners in Australia are facing challenges as interest rates keep going up. It’s causing trouble for those with variable-rate loans, as they’re seeing their monthly mortgage costs rise. To help you manage your mortgage effectively, here’s a simple three-step plan.
Step 1: Compare Your Options
Start by checking what your current lender will charge you when your fixed-rate term ends. This is your starting point. You’ll want to compare this with what other lenders are offering. There can be a big difference in rates out there, and even a small percentage point can mean significant savings. Don’t forget to explore fixed-rate options as well.
Step 2: Choose the Right Loan
Next, decide what type of loan suits your needs. You can go for a fixed-rate loan, which gives you stability but may not be the cheapest option. Ask about a rate lock facility if you choose this. Alternatively, you can mix things up with a combination of fixed and variable rates. This offers both stability and flexibility.
Step 3: Stay or Switch?
Finally, you’ll need to decide whether you want to stick with your current lender or shop around for a new one. If you decide to switch, make sure you have all your financial documents ready. This can help you explore new lenders’ offerings and potentially find better rates and terms.
As cash rates keep rising, it’s crucial to take action to manage your mortgage wisely. Following this simple three-step plan will help you make informed decisions about your home loan. By comparing options, picking the right loan, and deciding whether to stay or switch, you can navigate the changing mortgage landscape with confidence and secure your financial future. Your choices now can make a big difference in your finances down the road.
Maria Papa is a senior property and finance expert specialising in home loans, investment loans, self-employed loans, alt doc loans, car loans, personal loans, and loan protection. She has offices in Sydney, Melbourne, and Manila. If you have questions, you can call Maria at 0430 144 008 or email her at mpapa@maverickfinance.com.au.
Disclaimer: Your full financial situation will need to be reviewed prior to acceptance of any offer or product.