Aussie property owners 'should take advantage of low rates'
Article by Mozo
With the national cash rate standing at just 3.5 per cent, homeowners are able to save significant sums on their mortgage repayments.
With the cost of living continuing to rise, this is undoubtedly a timely boost for people who are feeling the pinch.
However, some financial experts are concerned that Aussies may not be taking full advantage of the savings being made on their home loans.
Homeowners may be tempted to sit tight and accept the terms of their current mortgage deal, but this is definitely a mistake. Even though rates have fallen, there is every chance you can find better home loan terms elsewhere and comparing different packages has never been easier.
Catapult Wealth director Tony Catt told the Advertiser that Aussies should grab the bull by the horns and renegotiate their payment plans, as it is far more cost-effective to pay off your loan more quickly when rates are so low.
"You should use the extra money from a rate cut to pay off your loan faster. If you leave the repayments as they are you actually increase your equity faster," he remarked.
Chief executive of the Investors Club Kevin Young also feels that now is a good time for property investors to reassess their strategies.
"How Australia's 1.7 million property investors use their newly acquired funds and manage their loans effectively could make or break their portfolios," he was quoted as saying.
"With just half a per cent drop in interest rates, investors with an average mortgage of $400,000 will save up to $6240 per year," Mr Young added.
Some economists are predicting another interest rate cut in September, which will strengthen the position of mortgage holders even further.
The likelihood of this happening will be made clearer when the RBA releases the minutes of its latest board meeting this week.
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