| Below are some steps you can take to reduce the | | | | 4. Consolidate your debts. |
| effects of rising interest rates: | | | | If you have multiple debts, such as personal loans and |
| 1. Consider a fixed rate home loan. | | | | credit cards, consolidating all your debt into your home |
| If you are on a tight budget and you want to know | | | | loan will save you having to pay a much higher interest |
| exactly what your monthly repayments will be, | | | | rate. As a result, it will leave more money in your |
| consider getting a fixed rate home loan. A fixed rate | | | | pocket. |
| loan locks in an interest rate for a set period of time, | | | | 5. Make more repayments |
| usually between 1 to 5 years. Before you get a fixed | | | | Making fortnightly or weekly repayments rather than |
| rate loan, speak to a qualified mortgage broker first to | | | | monthly repayments will help reduce your mortgage |
| ensure that this is the best option for you. Your | | | | and the amount of interest you pay. If you have extra |
| mortgage broker may be able recommend alternative | | | | money, for example extra savings, an inheritance or |
| mortgage products that may suit your needs and | | | | tax return, consider putting the extra money into your |
| circumstances better. | | | | mortgage. The mortgage balance and the amount of |
| 2. Increase your loan term out to 30 years. | | | | interest you have to pay will be reduced. |
| Increasing the term of your mortgage loan to a | | | | 6. Refinance your home loan |
| maximum of 30 years will greatly reduce your monthly | | | | Is your current mortgage loan full of hidden fees or |
| repayments. For example, for a $250,000 loan with an | | | | extra features you don't use? Is your mortgage loan |
| interest rate of 7.07%, by increasing your mortgage | | | | still the best option for you? Consider speaking to a |
| loan term to 30 years, your repayments will be | | | | professional mortgage broker about a home loan |
| reduced by $103 a month. We recommend that you | | | | review. A mortgage broker will check to see if your |
| seek professional financial advice from your mortgage | | | | loan is still the best option for you based on your |
| broker first before you increase your loan term to | | | | needs and current financial circumstances. |
| ensure this is the best option for you. | | | | 7. Get appropriate insurance |
| 3. Don't be fooled by Honeymoon Rates. | | | | If you are worried about the current economic climate |
| Many banks will advertise attractive honeymoon rates | | | | or your job security, then it might be a good idea to get |
| in an attempt to lure more clients. These rates are | | | | insurance. Income protection will protect you and your |
| usually one percent lower than the standard variable | | | | family in case you lose your job or you are unable to |
| rate, but after the honeymoon period has expired | | | | work due to illness or serious injury. |
| (after 12 months), these mortgages default back to the | | | | For more details and assistance with your home loan, |
| standard rate. Make sure you know what your interest | | | | contact an Australian mortgage broker for a home |
| rate and new repayments will be after the honeymoon | | | | loan finance review. |
| period has expired so there are no nasty surprises. | | | | |