06 May Are You Wondering What You Should Do About Another Rate Drop?
The RBA announced yesterday that they are dropping the interest rates by .25%. Although this has not come as a surprise, I was still shocked.
For someone with a home loan of $400,000 this equates to $19 a week in savings!
So what should you be doing?
Look to refinance – This is not always the solution as banks generally pass on the rate cuts from the RBA. However it may be wise to revisit your current lender or, more importantly, relook at the structure of your loan and if it is set up to allow you to achieve your goals.
Pay extra off your loan – This is one of the best things you can do as it allows you to get in front of your repayments and also build up some reserves.
I would advise the following 3 things:
- Pay off bad debts ASAP (credit cards and personal loans)
- If you do not already have a buffer, build 3- 6 months (or more) of cash reserves and sit them against your home loan to offset the interest.
- Call my office and make an appointment to review your structure and rate. Our service is free and as your goals change with time so does the need to revisit your current mortgage and investment loans.
Please let me know if you have any questions by sending me an email at email@example.com or calling me direct on 0401 663 311 or 1300 090 298.
I look forward to hearing from you.
Martin Bennett & The Loan Room Team