With Donald Trump’s recent election victory in the US, there is much talk around possible future interest rate rises on the back of his election promises. In line with his push for infrastructure and re-build in the US, economists are predicting that should Trump proceed with his promises, then the US Government will need to borrow heavily. This would then reduce the amount of money available for other countries to access, demand outweighs supply, which drives the cost of monies upwards. The end result is our banks would have to pay more for their funds, which would then be passed on to the consumer via higher interest rates.
Could now be the right time to fix your home loan?
Now may be a very good time to review your loan & possibly lock in a better rate or fix, with interest rates currently at an all time low. The period of declining interest rates following the GFC may be well and truly over. There are, however, some pros & cons that will need to be considered before choosing to fix some or all of your home loan.
5 Points to consider
- Typically fixed rate housing loans don’t have features such as redraw facility and some do not allow you to make extra repayments.
- Fixing all or part of your home loan can give you protection from future rate increases
- Fixing can make budgeting easier as fixing brings certainty of repayments each month
- By “breaking” an existing fixed rate term, charges may be incurred which could run into several thousand dollars depending on how rates have moved
- If rates fall again you won’t receive any benefits during your fixed term
Many options- Fixed, variable or split
There are so many options available to you, including a fixed, variable or split loan. Talking to our brokers is a great resource for you to tap into. Contact our office today on 6144 3230 or Steve on 0433 124 081. He has a wealth of knowledge built over many years and is happy to have a chat to review your loan to see if it’s the right fit for your financial needs.