How will the rising interest rates effect you?

After the Historically Low-Interest Rates in Australia over the past couple of years. Why is it Important to Refinance?

The Reserve Bank of Australia (RBA) has been gradually increasing interest rates over the past 9 months, bringing the cash rate from the historical low of 0.1% in Nov of 2020 then recently up to 3.35% in Feb of 2023. This change in monetary policy has far-reaching impacts on the economy and citizens, particularly homeowners. In this article, we will examine the history of interest rates in Australia and why it's important for homeowners to consider refinancing as rates increase.

The History of Interest Rates in Australia

Interest rates play a crucial role in the health of the economy, affecting the level of borrowing, spending, and investment. The RBA sets the cash rate to influence these factors, with the goal of stabilizing inflation and promoting economic growth.

Over the years, interest rates in Australia have seen significant fluctuations. In the late 1980s to early 1990s, the cash rate was at a high of 17%, reflecting the economic conditions of the time. In contrast, the cash rate was at a low of 1.5% from 2009 to 2016, reflecting the global financial crisis and the RBA's efforts to stimulate economic growth.

Why It's Important to Refinance as Rates Increase

As interest rates rise, it's crucial for homeowners to consider refinancing their home loans. Refinancing allows homeowners to take advantage of lower interest rates and potentially save thousands of dollars in interest payments over the life of their loan.

Refinancing can also provide homeowners with more flexibility in their monthly budget by potentially reducing their monthly mortgage payments. This extra cash flow can be used to pay down debt, save for a future goal, or invest in other areas.

Additionally, refinancing can also help homeowners secure a fixed-rate loan, which can provide peace of mind and protection against future interest rate increases. With a fixed-rate loan, homeowners can lock in an interest rate for a set period of time and avoid the financial stress that comes with rising interest rates and increasing repayments.

A Call to Action for Homeowners: Consider Refinancing with a Mortgage Broker

If you're a homeowner, now is the time to consider refinancing your home loan. Working with a mortgage broker can help you find the best refinancing options and secure a loan that meets your financial goals and needs. A mortgage broker can also provide valuable advice on navigating the refinancing process and help you avoid any potential pitfalls.

Don't miss out on the opportunity to potentially save thousands of dollars and secure a better financial future. Contact one of our mortgage brokers today and start the process of refinancing your home loan.

• Disclaimer

  The information provided in this article is intended for general informational purposes only and is not intended as financial advice. While we make every effort to ensure the information is current and accurate, we cannot guarantee its accuracy and completeness. Before making any financial decisions, it is important to consult with a licensed professional who can provide tailored advice specific to your individual needs and circumstances.