If you’ve bought your first home in the last decade or so, you could be forgiven for thinking that the interest rates you’re enjoying now are the same as they’ll always be.
As Hannah McQueen from enableMe states, there has been almost a decade of exceptionally low interest rates, and the Reserve Bank hasn’t forecast raising them until late 2019 or even early 2020.
It’s no wonder that many home owners have come to believe this is normal. Trouble is, it isn’t.
The average two-year fixed rate is around 4.58 per cent. Some 10 years ago it was more like 9.34 per cent.
So it’s an opportune time to ask yourself – what would your household budget look like if you were paying rates like that?
If you have any portion of your mortgage floating, you may have noticed these rates starting to creep up, even though the official cash rate hasn’t.
But if you’ve got a great fixed rate locked in for many years to come, why should you be worried?
Firstly many people know what they can afford to borrow based on these extra-low rates.
Ensure you can continue paying your mortgage when rates start to rise.
Secondly, this is your chance to get ahead, as borrowing has never been cheaper.
You should be focusing on making progress on your mortgage now and making the most of these conditions.
Low interest rates won’t be here forever, but while they are it’s an opportunity to get closer to being mortgage free, faster.
Make sure you don’t waste it.