In line with the recent cash rate rise by the Reserve Bank of Australia, interest rates have also increased again leaving most people with mortgages wondering what they should do – should I opt to fix my interest rate now before they rise again or wait it out with a standard variable rate?
With more increases on the horizon, now is a good time to give your home loan a health check. Our brokers can take a look at your current loan and can go to the market and select the best options for your situation and requirements from more than 35 lenders.
Following the interest rate rise in June this year, one of our clients opted to hedge their bets, fixing 50% of their loan and leaving the other 50% on a standard variable rate. This meant that with the recent rate rise, they protected 50% of their loan from the rise. An example of this scenario is below.
Scenario
Loan amount = $500,000
Fixed amount = $250,000
Repayments on fixed amount = $1,221 per month at 4.19% interest rate (30 year term)
Variable amount = $250,000
Repayments on variable amount = $1,083 per month at 3.21% interest rate (30 year term)
With rates on the rise this is a great way to have a facility where you can make additional repayments without penalties as well as have a facility where you can have certainty around your mortgage repayments.
If you’d like us to take a look at your current loan and provide you with some scenarios on going for a fixed or variable rate, please get in touch. Our friendly residential brokers are here to help.
To contact our residential lending team, email Head of Client Relations, Edwina Leota on edwina.leota@growthpointcapital.com.au
Our content is prepared and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. We recommend you consider whether it is appropriate to your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. All information pertaining to loans are subject to lenders terms and conditions and fees and charges and eligibility criteria apply.