When it comes to the potential borrowers, and the mortgage holders, the constant increase in interest rates is an untapped territory. Interestingly, the Reserve Bank of Australia increased the cash rate about 11 years back for the first time. Since then, it has shot up from 0.1% to approximately 1.85%.
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The effect of the cash rate rises
Naturally, the cash rate increase directly affects the home loan interest rate, which in turn impacts the amount you have to pay as your interest every month. Based on the calculations, when the interest rate on the repayment goes up from 3% to about 3.5%, for a home loan amount of $800,000, the repayments need to be about $3,592 each month. The annual amount would be $43,104 and an amount of $1,293,249 for about 30 years.
The borrowers don’t have to get shocked or alerted about the rate increases. Usually, the lenders in Launceston, TAS, will take an increased interest rate while evaluating the capacity for making all the mortgage repayments. The majority of borrowers need to search for that. And at this stage, they might be able to make the repayments until the financial situation gets altered for the worse.
However, it doesn’t indicate that you have to be complacent. No one can avert the increasing interest rates. Luckily, when you join hands with a leading mortgage broker, you can manage any increasing rate in the forthcoming days.
How does the mortgage broker support you with the increasing interest rates?
The following ways are how a mortgage broker can enable you to manage the increasing rates:
- They evaluate the current situation by evaluating your place as the rates increase. They can also enable you to arrive at a solution that can place you in a better position financially.
- Revert, refix and change the lenders in the fixed term is about to end. Also, a mortgage broker will complete the pricing request for deciding the ideal option.
- Enable you to refinance from a lender that provides you with a competitive interest rate. It would help if you didn’t stay loyal to the present lender when the loan fails to cater to your requirements.
- They negotiate on your behalf with the lender for attaining a competitive deal.
- They will provide the scope to determine whether a variable or fixed home loan is ideal for you.
- They can consolidate the debts for making it manageable.
- Use the offset for reducing the paid interest.
These are a few ways in which mortgage brokers can help you. To know more about this, you can check out mortgage broker Launceston. And other than changing the home loan, you can also opt-in for a few simple steps for preparing for an increased rate. It would help if you made ample changes to the lifestyle and pre-emptively cut the pointless costs. Ensure that you don’t live more than your capacity or means, as it can pose a risk of repayment defaulting. These points can help you to stay prepared and take the necessary help from the mortgage broker.