The Reserve Bank of Australia delivered its 10th consecutive rate rise last Tuesday, increasing the cash rate by 25 basis points to 3.60%, the highest it has been since June 2012. How will this affect you? On an $600k mortgage your repayments will increase by almost $100 per month. In addition to that, we see banks increase their interest rates above the Reserve Bank’s rate. They know mortgage customers are expecting interest rate rises and are counting on clients not checking.
Two important factors are causing mortgage holders to pay significantly more than they need to:
- Complacency: Mortgage holders expecting an interest rate rise but not checking if the increase is in line with the RBA increase.
- Loyalty tax: Mortgage holders believing their bank won’t “do the wrong thing” by them.
Erik Reurts, Epping Mortgage broker, advises you to be diligent. The general cost of living is increasing and these rate rises are an additional expense. In many cases over and above what is necessary. Check if your rate is still competitive. And that is what Erik and his team will do. They review your rate and if it is not competitive, ask your bank or lender for a better deal. They regularly reduce clients rates by 0.5% to 1.2%. On a $600,000 mortgage that makes $400 per month difference.
If you would like to see if you are paying too much, Let Erik Reurts – Mortgage broker Epping, review your mortgage. They offer a no win, no fee service.
- Erik Reurts – Mortgage broker Epping
- https://micah.com.au/a better deal/
- M: 0416 179 876
- E:erik@micah.com.au
