While, we can all agree that this is an extremely low figure, many people are unsure what they should actually do about it.
Most lenders have passed on at least a portion of the latest interest rate cuts, and those who have a home loan are already enjoying savings every month, but there are other ways you can make the most of low interest rates.
- Pay down your mortgage
Paying off debt while interest rates are low is a smart move. It can be tempting to start paying less interest every month now that you can, but if you have been comfortable paying off your home loan at the previous rate, it could pay to continue doing so.
By paying even a little but more each month you could shave years off of your home loan and save thousands as a result. So take this opportunity and get your mortgage as low as you can (just make sure you won’t get any penalties from your lender for doing so).
- Look at your investment options
Low interest rates are great news when you have debt to clear, but not so good for those with savings in the bank. To make your money work harder for you, take a look at your investment options and asking if spending more could help you earn more over time.
Property investment isn’t for everyone, but low interest rates do make it easier to get into the market and there can be tax benefits from negative gearing too.
If you plan on buying an investment property, just make sure that you do your research and have particular goals in mind. Try to find a property that has good prospects for capital growth and won’t put too much strain on your finances (you should always have a buffer in case of unexpected expenses or rates going up again).
To discuss investment properties in the Bacchus Marsh area, contact the Arbee Real Estate team.
- Shop around for the best deal
There is a lot of competition amongst lenders to offer the best deal. When comparing deals, don’t just take the interest rate into account when there are a lot of other factors to consider, such as whether your home loan package includes an offset account, redraw facility, flexibility and any other nice bonuses such as frequent flyer points.
If you already have a home loan it’s worth reviewing it to see if it still suits your needs and if you can take the opportunity to refinance or find a new home loan provider.
For any information about home loan packages, contact the Professionals Finance team.
- Talk to the experts
Before you do anything else, ensure you get solid advice from financial and real estate professionals who can help you. There is a lot to think about when switching home loans or investing and you need to arm yourself with as much knowledge as possible so you can make the best decisions.