While interest rates are expected to be stable in the near-term, many economists believe the next time they do move, they will move upwards.
Now might be the time to start thinking about what steps you can take to prepare for a future rate rise.
The most obvious starting point would be to fix your home loan while rates are low. Each person is different however, and it might not suit everyone.
Once you’re locked into a fixed loan you lose your flexibility and usually pay a higher rate, plus if rates do happen to slide further you’re stuck with the higher rate.
Another good way to prepare for an imminent rate rise is to start making extra payments now while rates are low and creating a buffer.
Taking an aggressive approach to mortgage repayments while interest expenses are low helps you to pay down the principal quickly.
Finally, a great way to prepare for an interest rate rise is to start practicing repaying at a higher rate. Work out what would happen to your loan if interest rates went up, and start paying that amount in each repayment now.
This gives you a great idea of how you would manage under the circumstances of an interest rate rise. If you find yourself struggling it may be the time to consult your lender or financial planner to assist you.
Call Perry Finance now to discuss how you can help prepare for any interest rate rises when it comes to your home loan.
