Poker City 1

The way to Defeat this Aussie Interest Beast?

There's panic in the media following a release of the newest inflation figures. It is nearly a certainty that interest rates is going to be increased later this week and probably one or more times again before the finish of 2006. Many home owners are still visiting grips with the newest increase in May 2006.

Clients are consistently asking us what they will do to protect themselves from future rate rises. There is no simple answer and some decisions are only a calculated gamble. As an answer to all the concerned The Aussie Method Home owners - here are some useful tips on the best way to stay ahead of the rising interest rates.

1. Take the anticipated rate increases into account

You have in all probability heard everything before but - Budget Makes Perfect.

Before you plunge into a property purchase or property refinance, remove a home renovation loan or end up buying a brand new car, please take the time to take into account whether you are able this expense. We strongly advocate that you draw up an in depth budget. In this budget you need to factor in possible interest rate increases.

It is no good committing you to ultimately a loan which you can afford today but cannot afford if the rates move up. It would be prudent to check the affordability of one's loans if the rates were to increase by as much as 2 percentage points. By knowing what you would need to do should the present rate hike continue you might well protect yourself from losing your property as time goes on

2. Review your overall loans

You could have a number of loans including credit cards, personal loans and the like. Generally these come for your requirements at a higher interest rate compared The Aussie Method to the rate you're paying in your mortgage. If you should be searching for ways to save interest costs, the easiest method is always to consolidate your entire outstanding unsecured loans into your mortgage. Admittedly this isn't always possible. To make the most of such debt consolidation you must have sufficient equity in your home.

3. Save some deposit

Despite all of the offers in the media for No Deposit Home Loans, it's not the best idea to behave on these. We are not in a buoyant property market now and every dollar you manage to put together towards your deposit will make you home loan repayments more affordable. Remember, every dollar you borrow attracts interest, therefore the more you save the greater prepared you are when rates rise.

4. Look at a basic no-frills loan

Shop around at the available loan products. When you have had your house loan for a while you may find that the Australian Home Loan market has grown and offers a selection of flexible loans to suit most borrowers. A fundamental variable home loan can save around one percent off the standard variable rate. The products are limited in features, however if all you are after is cutting your rate down around possible - a no frills loan will be the answer.

5. Fix the rate

Although the very best time to fix your mortgage rate might be behind us, it might still be possible to lock in most or part of your loan for a competitive rate.

Fixed rates are great if you worry about the interest rates getting away from control. By fixing the rate you'll need to pay for on your own mortgage, you gain greater certainty over repayments and minimise the impact of further rate increases ahead. The fixed rates offered today have a tendency to reflect what economists believe could happen to the variable rate in the future. If you have an expectation that the variable rates will undoubtedly be increasing - the present fixed rates is likely to be more than the present variable rates. Hence fixing the rate becomes sort of a gamble that by paying more today you will save more tomorrow.

6. Raise the frequency of your repayments

One of the easiest ways to pay for off your loan sooner (and cut your interest bill) is to increase the frequency of one's repayments. You could choose to move from monthly to fortnightly repayments. Fortnightly repayments reduce steadily the principal, giving you more equity and ultimately, lower loan costs.

7. Put up a Distinct Credit

One of the finest means of securing yourself against future rate rises (or any other financial eventuality for that matter) is to set up a type of credit against your property.

Type of Credit or Equity Loans as they are also known, have gained great popularity of late. These items allow it to be easy for borrowers to pay for extra on their home loan and "redraw" it when needed. You might just realize that having usage of a supplementary five or ten thousand dollars can make it better to retain your mortgage in the event your repayments are increased outside of your initial budget.
This website was created for free with Own-Free-Website.com. Would you also like to have your own website?
Sign up for free