How To Fight The Festive Rate Hike
From Michelle Hutchison, Money Expert at finder.com.au
Just when the Australian property market was enough of a talking point, some lenders have gone and raised home loan rates out of cycle, taking your monthly repayments with it. With Christmas just weeks away, the good news is that there are some key ways to make the most of the situation.
Refinance to a better rate
Finding the lowest possible rate is a good first step to countering the banks’ move, and it’s quite possible you might save even more than you were originally.
Currently, the lowest rate on the market goes to Mortgage House’s Summer Home Loan, at 3.79%.
Switching your current loan to a lower option can save you thousands during the course of its lifetime – leaving yours better off!
Becoming one with your debts
It’s a simple fact that even some of the lowest rate credit cards can’t compete with home loan interest rates, so why should you be paying off a higher interest (the same is also true for personal loans)?
Snowballing your existing debts into your home loan might initially bump up your repayments, but even recently-hiked property rates have lower offerings than other products, so be tactical about what you’re paying and where. If one thing can be easy this Christmas, it’s your debt.
Peripheral savings add up
If your new low-rate home loan is the primary hike-fighting tool, peripheral enhancements are the savings ninjas working on the edge to ensure you get the very best deal you can.
Employing a 100% offset account, as well as looking for loans that allow extra repayments, is a key way to knock over extra financial burdens on top of your new-found savings. You really have no excuses – be savvier and find a better deal for yourself!
Ask and you may receive
While rate changes are making news, this advice has stood the test of time for decades now. You need to own your financial situation and demand that you be treated as a valued customer. Make sure you’re polite, of course, but begin asking why you’re paying things like ongoing fees, application costs and legal expenses.
You’re signing up for a 30 year debt – you don’t need any additional burdens. If you don’t find the answer you’re looking for, perhaps another lender will speak your language.
Michelle is the Money Expert for finder.com.au, one of the biggest online comparison networks in Australia.