Interest rates will continue to rise in 2023 – you can take that to the bank.
How do we know?
Because Reserve Bank of Australia Governor Philip Lowe said as much.
The RBA lifted the cash rate to 3.6% in March – its highest level in more than a decade.
It was the central bank’s tenth consecutive rise and pushed many people closer to their ‘mortgage cliff’.
But Lowe didn’t pull any punches when asked what was still to come in 2023.
“The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,” he said, suggesting at least another two rises were expected.
Australia’s inflation rate hit a 32-year high of 7.8% in the December quarter and the RBA is committed to reducing that to closer to 4.75% by the end of the year.
And they plan to do it by continuing to raise interest rates until people rein in their spending.
The NAB is particularly pessimistic about interest rates, predicting another three rises to 4.1% this year.
Now you know what is coming, you can start making plans to minimise the financial impact.
But you’ll need to make some smart decisions and make them quickly.
The doubly whammy for Australian home owners
Interest rates continue to rise with unrelenting regularity and home owners around the nation are feeling the pinch.
Many have had the double whammy of seeing their mortgage repayments rise as they watch the value of their properties fall.
That is precisely why time is of the essence.
Depending on how much money you have borrowed, rising interest rates and falling property prices may be squeezing your ability to refinance.
If your fixed rate expiry date is approaching, the time to act is now!
That’s because economic forces could push your LVR (loan-to-value ratio) into territory where you won’t have the luxury of being able to refinance.
According to recent reports, homeowners around the country have suffered an average 7.2% slide in the value of their properties, led by the Sydney market which has crashed 13.8%.
Interest rates: Getting out of a fix
A staggering 40% of Australians fixed their home loan in 2020. Record low rates were too good to refuse and many jumped at the chance to borrow vast amounts of money.
But the day of reckoning has come.
Most on fixed rates are facing much higher interest rates when those loans expire unless they take immediate action.
There is no time to waste.
Fixed rate expiry will expose homeowners to the full force of interest rate rises – rises we know are continuing.
That’s why taking positive action now is vital in giving yourself the best protection against the rising tide.
If your fixed rate expiry date is less than eight weeks away and you don’t look at refinancing now, the RBA could raise rates twice more in that period and deny you that chance.
Homeowners who do nothing risk being forced onto whatever default rate their lender designates and for many coming off a fixed rate, it will be significantly higher than the standard variable rate.
The result is a potentially scary rise in your monthly repayments.
But there is a solution.
Save thousands by refinancing
Interest rates are rising, inflation is rising but if you are smart, you don’t have to lose your lifestyle.
By refinancing now, you may be able to significantly reduce your mortgage repayments.
You could be putting hundreds of dollars a month back in your pocket and potentially saving up to $15,000 a year.
Never resign yourself to the notion that you can’t do anything about rising interest rates – you can!
You could beat the system and ease your economic pain by exploring your loan options, potentially refinancing on a better deal with a brand new home loan.
With the finance architects at KnowHow Property at your side, you could save hundreds of dollars a month and keep living your home-made dream.
There may be many benefits to refinancing with KnowHow Property:
- Better mortgage rates
- Lower monthly repayments
- Shorter loan terms
- Consolidate debt
- Fixed-rate options
- Easy and fast process
Talk with KnowHow Property today
Just like shopping around for the best power or phone deal, refinancing your mortgage could be essential.
It could save you thousands of dollars as well as reduce the term of your loan.
Many Australians have been partly shielded from the Reserve Bank of Australia’s interest rate onslaught by fixing their mortgages when rates were lower. But time is running out.
There may be a way to significantly reduce the suffering and keep those mortgage repayments down.
Find out how to rise above your mortgage cliff and read more about refinancing here.
Want to know how much money you could save by refinancing? We’ll tell you in just 15 minutes. Contact us for a no obligation discussion about your options.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.
