Carl Taylor


pInterest rates have dropped in Australia dramatically over the past months, we are now at record lows. Many home owners seem to be keeping up their repayments at the same level to try pay off the principal faster, while this strategy has its merits what other strategies could they be using?/p
pHere’s a few quick tips some of the experts giving./p
pstrongWait a bit longer before fixing interest rates./strongbr /br /Despite the interest rate reduction in all home loan products, there is still a considerable gap between the variable and fixed rates on offer. Discounted variable interest rates of around 4.69% are available, compared with fixed of 5.19% for three /br /strongLook for a home loan that offers flexibility/strongbr /br /However, once rates do bottom out – although this can be difficult to pick – you want to be able to switch to a low fixed rate, or perhaps split your loan into fixed and variable. Therefore, if you’re taking out a home loan now, make sure it provides the flexibility to switch in the future at a reasonable /br /strongTake out an interest only loan but make principal and interest repayments/strongbr /br /If there is some concern about job security or a reduction in future income (perhaps for one partner to stay home with a baby), taking out an interest only loan can provide some breathing space if required. However, while rates are low and you have full earning capacity, make principal and interest repayments plus more if possible to get ahead. The principal and additional repayments can be accessed as redraw in case of future /br /strongConsider mortgage protection insurance/strongbr /br /This is the insurance that ensures that you, as the borrower, can continue to make your loan repayments should you become seriously ill and unable to work. A 38-year-old couple with monthly loan repayments of $1500 can each be covered for the full loan repayment at $50 per month. Maximise this unique opportunity to its full potential but make sure you have contingencies in place for when rates do rise again./p
pIf you have any extra tips you’d like to share, please leave a comment or join our discussions in the forum./pimg src=”″ height=”1″ width=”1″/

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