Mortgage advice: Pay off home loans as if interest rate was higher

Thursday 15 October 2009

Article by Mozo

Tips have been offered on how to cope with the recent rise in interest rates.

When it comes to home loans, Mortgage Choice said people should be sure to pay off their loan as if the rate was actually higher.

Kristy Sheppard, the firm’s senior corporate affairs manager, explained this would prepare people for further increases, as well as creating a financial buffer, which could be good advice for those looking for low interest home loans.

"It is always a clever strategy to repay your mortgage as if the interest rate was at least one to two per cent higher," she commented.

Ms Sheppard also advised keeping track of mortgage providers in order to be aware of when they may push up their rates.

Other tips offered by the expert included consulting a mortgage broker to compare home loan options, reducing the amount owed by paying a large lump sum and considering fixing the rate of interest for peace of mind.

Meanwhile, new figures from Mortgage Choice suggested that there has been a decline in the number of people opting for fixed rate products.

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