RBA Increases Interest Rates - to 7.25% - What Does it mean to you?

As you all know the rates have been pushed up by the Reserve Bank today – to 7.25%.

 What it basically means is that the average rate charged by the Major Banks (Such as Commonwealth) which was around 8.27% will go upto around 8.52% - or more!. (This rate is for loans above $250,000 and have an annual fee).

 With the current rates as they are, many of the first home buyers are going to find that they will not be able to afford the houses they want to purchase. Which is unfortunate and takes us Australians away from the Aussie dream of owning our own home. But the Government seems to be doing something about it – but I am not sure how well its going to help the battling first home buyers.

 Another bunch of people who are going to be majorly affected by this are the folks who went and bought properties that are well above their capacity and are now struggling under the inflated monthly repayments. To top it off the “Buy Now – Pay in 48 months” society – which lives on Credit Cards, Personal Loans, Car loans – are also going to get affected –because the interest rates for these are going up as well.

 Now there are couple of things that you can do:

 1. Look at what your bank / financial institution’s interest rate & fees are – and compare it to the “standard” rates (like the one I gave you above) and see if you are better off or worse off – If you are better off – tell everybody – so that your friends and families can get a better rate too.

 2. If you are worse off – first off talk to your bank / financial institution – to see if they can do any better than what they are currently charging you. If not, then get in touch with a reputable Mortgage Planner – to help you clearly understand your own financial situation and then to help you find a better solution.

 3. Do the same thing for your personal loans, car loans, credit cards, etc. – See what your current interest rates are and either look around for a better deal or again contact a Mortgage Planner to find a better deal for you – it might mean that you will need to put all the loans into one with a lower interest rate or move them into cheaper options, like a cheaper credit cards, cheaper loans, etc.

 With a tight cashflow that you may already experiencing, the current rate increase will make an impact on it even further. In these cases, every single saving will make a huge difference. So please do review your financial situation in a bit more detail and sort things out. If you have any questions or want any guidance, please email me or call me so that we can have a quick chat to see how we can help you.

Have a great Week!

PS: I work mostly via referrals – so please don’t keep my services a secret!