The first thing to do when interest rates rise is to stay calm. It’s OK. We’ve got you.
Rates increases are inevitable – especially after over eleven years of status quo with record lows and no increases from the RBA. So yesterday’s increase of 0.5%, taking the base rate to 0.85% is no surprise.
Economists are predicting that the cash rate will rise to 1.5% by year-end and 2% by mid 2023. Whether this happens or not, we’ll just have to wait and see. But in the meantime, there are a couple of things you can do.
1. Talk to us. We can take a look at your loan and come up with some options to reduce the impact – such as fixing part of your loan or refinancing over a longer term to reduce your monthly repayments.
2. Review your budget and see if there’s anything you can cut back on to allow you to pay the additional cost of your home loan.
Don’t buy into the gloom and panic from mainstream media. The reasons the RBA increases the cash rate is to stabilise the economy, reduce inflation and slow down the housing market – to name just a few.
The last thing the Reserve Bank wants to do is to put people out of their homes or into financial distress. In my opinion, the interest rate increases will be managed and manageable. We just may have to do a little bit of planning to make sure we’re in a good position to manage the additional cost.
If we can help, we’re just a message, phone call or email away.
