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In May this year, Australia had its first interest rate increase since 2010. Since then, we’ve had another six more rate raises. The cash rate set by the RBA is currently 2.85% per annum; however, most mortgage holders don’t have that rate on their home loans as banks determine their- rates. With the rising cost of living and the financial pressure on households, many are experiencing mortgage stress. So, we’ve shared some simple tips to help you manage and potentially avoid mortgage stress.
Speak to your bank about your situation
Some banks are offering temporary assistance to help with mortgage stress. Speak to yours about your current situation, and they will be able to provide you with solutions to help you manage your mortgage. Negotiate and ask if they can give you a better rate than what you are currently on; otherwise, you’ll be considering other lenders.
Review your current lender
When was the last time you refinanced your loan? If it’s been two-plus years since you’ve refinanced, you can probably get a better rate than the one you’re currently on. You should definitely shop around and look for a better rate or one that suits your needs today. If shopping around for a- loan is confusing or overwhelming, seek assistance from financial experts not employed by a specific bank, like Helix Plan, who will research and find you the best rate based on your mortgage needs.
Interest only repayments
While the purse strings are tight, consider paying interest only on your loan. This means you’re only paying the interest portion of your loan, which will lower your monthly repayments, easing financial pressures.
Consolidate your debts
When you’re feeling the squeeze in one area of your finances, it slowly impacts all your other financial commitments too. Consider consolidating all your other debts, like your car loan, credit cards and personal loans, into one so that you’re only paying one repayment, minimising your financial pressure.
Create & stick to your budget
An obvious one but many who have one doesn’t firmly stick to their budget. Establishing a budget is a plan to spend your money. It will help you understand your financial commitments and track your expenses, empowering you to feel in control of your money.
If you’re feeling scared or embarrassed that you’re having trouble keeping on top of your home loan, you’re not alone. And the earlier you realise you need help and seek it, the better for your financial and mental well-being. Speak to SFE Loans by emailing enquiry@sfeloans.com.au, and we can provide specific guidance to help you overcome your financial difficulties.
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