Don’t let rising interest rates get you down…

Analysts are forecasting interest rates to rise by at least 1% by the end of the year. At which point the average variable rate would have climbed to around 8.2-8.5% – pre-GFC levels!

If you’re concerned about rising interest rates rest assured you do have options at your disposal. Currently there are some very competitively priced fixed rate loans. One of our panel lenders if offering a 3 yr fixed rate of 7.10% – that’s cheaper than most of the banks discounted variable rates.

If you require flexibility and don’t wish to fix you should consider a review of your current interest rates, particularly if your loans are more than 2 years old. Currently we have one of the best variable rates going at 6.88% – so depending on your situation you might be able to switch lenders and save thousands!

Cheap home loan rates aside there’s a raft of other strategies you can use to ease the burden of rising interest rates. Why not try and make extra payments into your loan while interest rates are cheaper. This helps you build up a buffer and ensures that you have extra funds available should you find yourself short one month.

You could also convert any principal & interest [P&I] loans you have to interest-only [IO] – this can lower your monthly repayments considerably whilst still giving you the option of paying down your loan by making extra ‘principal’ payments at any time.

Not sure if a fixed loan is right for you? Why not take an each way bet and consider fixing 50% of your loan. If interest rates rise the fixed rate portion of your loan is protected at the lower rate. Conversely if rates decrease you will still get the benefit of the variable rate portion.

Are you channelling all of your savings into paying down your highest rate debt, such as credit cards? There’s no point trying to pay off your home if your credit card is overdrawn and you’re only making the minimum monthly payment. Why not switch to an IO loan and direct the rest of your available cash flow to paying off your credit card. Alternatively, if you have available equity you could consider consolidating all of your high interest debts. This will reduce your fixed monthly expenses and free up more cash flow.

Want to make lasting change? It might be a good idea to reassess all of your expenses – yes that’s right I’m talking about the dreaded b b b ‘budget’. Don’t get caught up trying to save yourself 0.05% on your home loan without addressing all of your other expenses and spending habits!

Free Property Renovation Seminar* [Feb 8th] – If you want to get results you have to learn from someone that is getting the results you want. I met Andrew less than 2 years ago and I can honestly say that when it comes to making money renovating property he certainly ‘walks the talk’. I’ve seen his projects and I’ve tracked his results and I can say that he is making some very good money right here in Adelaide. For more details see our investment article

Please note we have recently updated our office contact numbers. Our new details are;
phone: 08 8451 1500
fax: 08 8451 1501

As you take a moment to read this month’s news, remember Urbantech is always as close as your phone otherwise, see you next issue.

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Your Partner in Success,

Sam Cocks
Managing Director
Urbantech Group
Finance Adelaide, Home Loans Adelaide
http://www.urbantechgroup.com.au/

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