There are a number of ways to combat the RBA rate hikes but it includes a wholistic approach. This involves dealing with your existing lender, finding a new lender and cleaning up your own finances. Reducing costs is one thing, but increasing cashflow is also important.
1. INSTANT RATE REDUCTION:
One way to combat the RBA rate hikes is to get a rate review from your lender. A rate review with your lender can gain you up to .50% off your existing rate. This can save you thousands per year in interest alone.
2. REFINANCE
A typical refinance will gain you a new business rate which could save you up to 1% interest or more per year over the next two years. On an average loan and considering the transfer costs and application fees, over two years you can save around $9250.
3. BASIC PRODUCTS
Another way you can beat the RBA rate hikes is to choose the right product. You’ll find that most lenders will charge a package fee of up to $395 per year to have an offset facility as well as an elevated rate. This can work out to be an additional $1350 on an average sized loan, just for the luxury of having an offset. You can have the same benefits just by throwing additional funds into your redraw facility.
4. VARIABLE OR FIXED?
You can save up to $4000 per year on the average loan size just by shifting to a variable rate.
It can seem overwhelming when youre looking at a rate cliff. You may be on an excellent fixed rate of 2% or under, looking to jump to over 5%. This is over double your existing rate.
Going through this process is going to minimise the concern to a degree.
Overall however, you also need to look at other areas of your finances to see where you can reduce costs. Shaving grocery costs, entertainment and clothes can easily put you back in the drivers seat.
If you are finding it difficult to get back the financial control you want then another option is to speak to a financial debt specialist. See the link below for details.