Important Information

You may have heard by now that Westpac increased their interest rates outside the official RBA rate monthly rate decision yesterday.

The word in the finance industry this morning is that the other banks and other lenders will probably follow within the next few days/weeks. That may or may not happen but that's what the economists and analysts seem to be predicting.

This is never good news for mortgage holders. Our phone has been running hot this morning with people asking how they lock in their interest rates and whether they should.

We really need a crystal ball to know whether it’s a good idea to lock in your rate or not but some important things you need to know about fixed rates are that with MOST lenders:

- there are penalties for paying out a fixed rate loan during the fixed period so if you are planning on selling your home during the fixed period DO NOT swap to a fixed rate

- there are often penalties for paying more than $10k a year off a fixed interest rate so check the conditions on the fixed rate loan before you lock in. If you are going to pay more than $200 a week extra off the loan then I would consider staying variable OR doing part fixed and part variable

- your redraw is locked during the fixed period with MOST lenders so if you have money in redraw that you may want to use during the fixed period then draw that out and put it into a savings account or onto a variable rate loan so you have access to it if you need it during the fixed period.

If you want to know more or to discuss your personal situation give us a call on 49190478.

Feel free to share as this is important information :)