Feeling the Pinch From Higher Interest Rates? It Might be Time to Think About Refinancing

Feeling the Pinch From Higher Interest Rates? It Might be Time to Think About Refinancing

10 June 2024

In recent years, Australia has experienced historically low interest rates, which have supported economic growth and provided a favourable environment for borrowers. However, as the economy continues to recover from the impact of the COVID-19 pandemic, the Reserve Bank of Australia (RBA) has signalled a gradual shift towards higher interest rates.

 

This shift towards higher interest rates may have some borrowers feeling uneasy about their current financial situation, but it also presents an opportunity for those looking to refinance their loans.

One reason why it’s a good time to refinance is that rising interest rates can lead to an increase in the cost of borrowing. This means that if you have a variable rate loan, your repayments could increase, putting additional pressure on your budget. By refinancing to a fixed rate loan, you can lock in a guaranteed interest rate, protecting yourself from future rate hikes and ensuring your repayments remain consistent.

In addition to potentially saving money on interest payments, refinancing can also help you access better loan features and benefits. For example, if you have built up equity in your home, you may be able to refinance to a loan with a lower interest rate and higher borrowing limit, allowing you to access additional funds for renovations, investments, or other expenses.

Overall, rising interest rates may seem like a cause for concern, but they can also present an opportunity for savvy borrowers to take advantage of lower rates and better loan features. If you’re considering refinancing, it’s important to do your research and compare loan options to ensure you’re getting the best deal for your financial situation.

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‘Til next time, ciao 😊

 

Disclaimer: The information is this article is for general information only, it is not intended and should not be considered as either legal or financial advice. The information contained herein should not be relied upon solely and all parties are encouraged to obtain their own independent advice before making any financial decision.
Alvin Ho

Article by Alvin Ho

WE SPEAK YOUR LANGUAGE 中文 Originally from Hong Kong, Alvin speaks multiple languages including Cantonese and Mandarin. He has 10 years' experience in the finance industry and his extensive expertise…

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