What you should do to get the maximum benefit from falling interest rates.

It only takes a look at what has happened to interest rates in the past few months to get a clear indication of why we are being approached for loans by more and more first homeowners and upgraders.

Of course falling property prices and the First Home Owner Grant are also playing a role but consider what has happened with interest rates. In February the Reserve Bank of Australia reduced the cash rate to 3.25%. As a result variable rates dropped to about 5%.

The net effect? Those with a loan of $350,000 are now paying about $1000/month less then they were before the cycle of interest rate cuts started some six months ago.

That is quite a dramatic effect, isn’t it? If you are planning to buy, this turnaround makes home ownership a lot more affordable.

On the other hand, if you already have a variable loan you should be putting as much additional disposable money as possible into paying off your variable loan. This is a highly effective way of dramatically reducing the term of your loan.

If you are not happy with your current loan arrangements or would like to find out if right now there is something better out there for you, give us a call.