RBA Rate Rise: Could You Be Paying Too Much on Your Home Loan?
The Reserve Bank of Australia (RBA) has raised the cash rate to 4.60%, making it more important than ever for borrowers to understand exactly what they’re paying on their home loan.
The 0.25 percentage point increase is the fourth hike this year. Ray White chief economist Nerida Conisbee expects it to further reduce borrowing capacity, while existing borrowers could also face higher repayments as lenders respond.
But your lender’s rate isn’t necessarily the only rate available to you.
A home loan review can establish how your current interest rate compares with other options in the market and whether negotiating with your existing lender or refinancing to a new one could reduce your repayments or provide loan features better suited to your circumstances.
Higher interest rates are outside borrowers’ control. What you can control is whether you continue paying your current lender without checking what else is available.
If it’s been a while since you reviewed your mortgage, now could be a good time to see how your loan compares with the wider mortgage market.
About the author – Alex Veljancevski is a Sydney Mortgage Broker with Eventus Financial, which assists first home buyers, investors, upgraders and borrowers seeking to refinance to a better deal on their home loan.