Beat rising interest rates
As the Australian economy continues to strengthen, the Reserve Bank of Australia is pushing up the official cash rate, putting financial pressure on many Australian households. Now therefore is the time to review your financial situation and let your home loan potentially save you money. Homeloans general manager of third 3rd party sales, Tony Carn, explores options for Homeloans customers to use their home loan to beat rising interest rates.
Your home loan interest rate is most likely the lowest of all your debt interest rates you are paying on all of your debts. It is therefore important to look for opportunities to utilise your home loan to ensure you don’t have any unnecessarily high commitments on other facilities such as credit cards, store cards, hire purchase agreements, leases, personal loans, car loans, and even some business debts.
Here are some tips for ways to make your home loan work better for you:
Consolidate your debts
The annual cost of a credit card with a typical interest rate of 18% and an average drawn balance of $6,000, is $1,080 per annum. By refinancing your credit card into your home loan, you could easily save over $600 in the year ahead, and help you clear your card and better manage your limits on an ongoing basis.
Consolidating debts does more than simply reduce the overall level of interest you are paying. It also frees up cash on a monthly basis which can help cover the required increase in repayments from home loan rate increases.
Review your household budget
With the end of the financial year rapidly approaching, now is the perfect time to sit down and prepare a budget for the year ahead.
Those of us who don’t keep a budget are often surprised by how much all the little expenditure items can add up each time we open our credit card statement. You may also be surprised at how much a lot of little savings can also add up to! A simple household budget can help highlight small costs that when removed can add up to a substantial saving. As an example, one less take-away coffee a day can quickly add up to over $60 a month!
And remember, as a customer with a Homeloans loan, you are entitled to a range of sensational benefits, from discounts on grocery shopping and fuel, to great deals on dining and entertainment. You should have recently received your personal Homeloans Member Advantage Card, giving you the opportunity to save hundreds, or even thousands every year!
To speak to a Homeloans consultant about your refinancing options, please call 1300 78 78 74, orclick here. To access your range of Homeloans customer benefits, visit www.homeloans.com.au/benefits.
*Figures and interest rates are indicative and used for the purpose of this comparison only. Homeloans does not assert that these bear resemblance to current interest rates and as such should not be relied upon without first seeking independent financial advice based on borrower’s individual circumstances. Borrowers should consider that whilst consolidating existing consumer loans into a “Home Loan” (as demonstrated by the above example) may reduce the combined monthly repayments of current consumer loans, the overall interest cost of the existing consumer loans may increase depending on the overall term of the consolidated loan compared with the current individual loan terms and interest rates applicable to any consumer loans being consolidated. Homeloans recommends that borrowers seek independent financial advice before proceeding with any action to consolidate their loans.