Are You Prepared For Interest Rate Rises
Don’t know when but they haven’t gone up for 4 years so it isn’t going to last much longer!
Well the real answer is no one knows, but some of the financial wizz kids are predicting something like 1.5% rise.
To me that means expect a 2% rise.
So What Will It Mean to You?
A 1% rise on a new mortgage will increase the weekly payments by around $20/week for every $100,000 borrowed.
That means for a 2% rise on a typical $400,000 mortgage you could be looking at $160/week.
Don’t forget this won’t be the only thing going up. Gas, Water, Electricity, Rates, all seem to be on the move upwards while not a lot seems to be happening on the wages front.
Here are a few thoughts about what you could do:
Already Along The House Journey
It could be worth looking to fix either part, or all of your mortgage. If you have separate mortgages for the house and the land it may be best to fix one while leaving the other variable to maintain some flexibility.
Start increasing your mortgage payments now so you get used to living on less, and you build up a cash buffer.
Think about contingency plans in case you get hit with something like a reduction ,or loss of income.
Starting To Look At A New House
You need to factor in the potential price rise into your budget, and your expectations.
Considering going for a smaller house rather than having a financial millstone around your neck for the next 5 or more years.
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