Mortgage Rate Forecasting – Steps that Balance your Finances During Frequent Fluctuations of Interest Rates
Most of the borrower generally keep an eye on the prevailing mortgage interest rates. However, what they miss or say neglect is that they do not draft a strategy to combat the rise or fall in interest rates or the rates that stay stagnate. Instead of developing a strategy, they anxiously wait for the announcement from the Reserve Bank and worry about how they will manage the extra amount to fulfil the mortgage repayment; if in case the rates increases on their existing loans.
In such scenarios, this what you need to do –
When the Rate of Interest Increase
To handle this situation, you need to forecast what mortgage rates will do and look at your options at the earliest according to it, before it gets too late. Therefore, instead of following this traditional route, consider how you can stay ahead of mortgage rate rise and find yourself paying the best deal to save your hard-earned money.
When the Rate of Interest Remains Same throughout the Loan Term
Recently, majority of economist predicted that the interest rates would stay on hold for the next 12 months. Across all over Australia, variable rates are generally offered at 5% or less. It means, at this time, if the rate of interest is higher, than it is recommended for you to look for the best deal by considering all vital facts. In case, if you are not going to stay in your home for longer, let us say 5-8 years, then it is highly recommended that you don’t lock in the rate because you don’t want to recoup the cost in the end.
When the Rate of Interest Decrease
It is predicted that the rate of interest will not fall more in the end of this year. However, if in case it falls then it is necessary for you to review the comparison rate, so that you will get the best deal in lowest interest rate. You can refinance the loans at cheapest variable rate. It even ensures that if in case when the rate rises, you still have an affordable loan.