5 Strategies to stay on track and continue to have better savings
There is a rapid rise in interest rates in Australia, and according to some news in the market, the RBA might increase interest rates again.
The increase in interest rates will have a direct impact on the mortgage payment and this is a huge cause of concern for not only the new buyers in the market but also people who have existing loans and are worried about the imbalance in their budget which the extra repayments may cause.
Here are a few tips to help you lower your mortgage payment, stay on budget and have better savings.
Strategy #1 Consolidate Mortgage
Mortgage consolidation is the process of merging multiple loans into a single loan. This can be a good option for people who want to save money or have lower monthly payments as consolidation may give you better deals.
Strategy #2 – Refinancing
The refinancing of a mortgage occurs when the home-owner gets a new loan to replace their current one. The new loan should help the home-owner save money or accomplish another financial goals. Refinance could save you thousands of dollars on your home loan. So, if you’re thinking about saving those extra dollars, check out the benefits below.
- Save Money: Through Refinancing, you could be entitled to significant savings by securing a cheaper interest rate and lowering your monthly repayments.
- Get your loan paid off sooner: If you’re not struggling to make your current mortgage repayments, refinancing your loan could give you the opportunity to reduce the number of years you have to pay it off as with lower repayments you will save more and can use the savings to pay off loan sooner.
Strategy #3 – Get access to equity
If you have enough equity, refinancing could also help you buy an investment property by using the equity. You may not even need a deposit. That’s because many lenders will let you use the equity you have in your home to buy another property.
You can get funding for extensions or renovations: Taking personal loans or using your credit cards to fund your renovations or extensions might seem easy but have their disadvantages as they have high borrowing cost. Instead you can use equity and take higher loan amount against your existing property.
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Strategy #4 – Use Loan Product Features – Offset & redraw Accounts
Offset accounts are transaction accounts that give you access to your money. They are similar to everyday transaction accounts, but with some added benefits.
Offset accounts can help you save on interest, reduce your tax payable, and more.
Redraw facilities allow you to access additional repayments that you have made on your home loan.
These features can help reduce the amount of interest you pay on your home loan while at the same time giving you access to your funds if required.
Strategy #5 – Review Ongoing Expenses
According to a recent survey released by Consumer Group Choice it was found that in more than 1,000 households, nine out of ten Australians say their budget has come under increased pressure in the past year due to the continuing increase in cost of living.
The research found that 90% of households surveyed said their bills have gone up in the past year.
Therefore, to save money, it is helpful to keep track of your expenses on dining out, subscriptions, and impulsive purchases as well as on utility bills like phone, electricity, Internet & gas. You can use these savings to tackle interest rate rise by keeping this money in offset accounts or making higher repayments
If you’re feeling the pinch of rising interest rates, contact our experts at Nfinity Financials. We are proud to have our lead broker as the 3rd ranked broker in Australia as per the ratemyagent ranking for 2022.
Our mortgage experts are always happy to help you with any advice you may need about your loan. Give us a call now on 1300 GET LOAN or 1300-438-562 for professional and friendly service.
