Interest rates have been on the rise lately, and are expected to continue until the end of the year. Many borrowers are concerned about what this means for them. It is important to remember that there are ways to protect yourself from rising interest rates. In this blog post, we will discuss some tips you can follow to help protect yourself from interest rate rises and stay ahead of your finances.

Rising interest rates don’t have to mean higher monthly payments. If you’re concerned about how a rise in interest rates will affect your budget, there are things you can do to mitigate the impact.

Request a Home Loan Health Check

Start by requesting a Home Loan Health Check from your mortgage expert. This will help you understand where you currently are and what options are available to you. You may find that you have more options than you thought.

What’s involved in getting a home loan health check?

A home loan health check is an important part of understanding your finances and making sure you’re getting the best deal. Looking at factors like interest rates, monthly payments, features offered with loans including repayment options, or additional costs that may come along if certain things happen (like high inflation), you may find out that you have more levers to pull to help you stay ahead.

Some of the things to consider when undertaking a home loan health check are:

1. Check your current interest rate

2. Do you have the capacity to increase your repayments?

4. Check which fees and charges you are paying with your existing loan

5. If you have a fixed-term interest rate, what will the impact be once it ends

6. Have your circumstances changed since you started the loan?

7. Are there any new or better home loan features that you can take advantage of?

8. Check your property’s value

9. Are you considering renovating, moving or leasing your current property?

10. Could you consider consolidating any high-interest liabilities (such as credit cards or personal loans) into your home loan at lower interest rates?

Having a good understanding of these things, and having answers to these questions can go a long way towards helping you make the most of your financial situation.

Whilst it can be a daunting task to take a deep dive into your finances, the benefits really can pay off in the long run. Thankfully, GA Finance has a team of financial experts who can work with you to help you understand your current situation and get you into the most comfortable position for your circumstances. Speak to GA Finance today and get a home loan health check here.

Other ways you can stay ahead of Interest Rate Rises

Switch to a fixed-rate home loan

If you have a variable-rate mortgage, now may be the time to consider switching to a fixed-rate home loan if you are concerned about possible future rises. With a fixed-rate mortgage, your interest rate will be locked in for the term you have committed to (for example a 2-year fixed rate term), which can protect you from rising interest rates. This option may not be right for everyone, as it may come with a higher interest rate than your current variable-rate mortgage, but it is worth considering if you are worried about interest rates continuing to climb.

Refinance your car and personal loans

Another way to save money on interest is to refinance your car loan. If you have a car loan with a high-interest rate, you can shop around for a new loan with a lower interest rate. This can help you save money on interest and lower your monthly payments. You can also refinance your personal loans to get a lower interest rate and save money, or even consolidate all of your loans into a single loan.

Pay off your debt as quickly as possible

The faster you pay off your debt, the less interest you will ultimately pay. To do this, focus on paying down high-interest debt first while making minimum payments on your other debts. This will help you avoid paying more in interest over time, which will ultimately save you money.

Make the most of your offset account/s

An offset account is similar to any other transaction account, but with one valuable difference. Any funds within the offset account are taken off your outstanding loan balance, which means the more money you have in the account, the more interest you save. While mortgage offset accounts have their advantages, they may not be for everyone so it’s best to speak to your mortgage expert to discuss the pros and cons.

Consider a home equity loan for debt consolidation

If you have equity in your home, you can take out a home equity loan and use the funds to pay off high-interest debt. This can help you save money on interest and get debt-free faster. However, it’s important to remember that your home is used as collateral for this type of loan, so make sure you can afford the monthly payments before taking one out.

These are just some of the ways you can protect yourself from rising interest rates. As always, it’s best to talk to your financial expert to discuss which option is right for you and your unique situation.