3 ways to make the most of the record low interest rates

Interest rates are a hot topic right now with the Reserve Bank of Australia (RBA) cutting rates by a further 0.25 percentage points in May, bringing the official cash rate down to 1.75 per cent – the lowest one on record. This is great news for homeowners who are currently holding a home loan or new buyers looking to get in the market, however how can you take advantage of the low interest rates if you already have a home loan?

1. Consolidate your loans.

If you’re tired of managing several loans from different lenders, or if you wish to have more control over your finances, consolidating your loans may be the ideal option for you. As the name suggests, this involves moving all of your loans into one loan, under one lender, making everything so much more convenient on your end and only having to pay one interest rate.

This option is not for everyone, however, as short-term, high interest type debts, such as credit card debt may draw out the life of the loan than necessary. Speak to us today to find out if consolidating your loans is the right move for your personal circumstances.

2. Refinance your loans.

The record low interest rates offer the perfect opportunity to review your current loan to assess whether it still meets your needs, and work out how competitive it is against other loan products on offer in the current market.

If your loan is no longer competitive as it once was, speak to us about your options and we can assist you in renegotiating your loan with your current lender to help you get a better deal or look at alternative loan products that are more suited to your current situation.

3. Make higher repayments.

This is an ideal option for those who wish to pay off their loan sooner. As interest rates drop, you continue to maintain the same level of repayments to your lender, paying less interest and more principal, which leads you closer to paying off your loan.

The best part is that you do not have to pay more to do so. It is advisable to check with your mortgage broker that your current loan product allows you to make extra repayments as some loan products have terms permitting people to do so and can sometimes penalise you with a fine for doing so.

If you are thinking about any of the above options, speak to us to ensure it is the right decision for your current situation and will help put you on a better financial path. We can do the leg work for you and offer loan products that you may not have previously known about. Get in touch with us today, call (08) 9367 4222.

 

Written by Cale Walsh.