As we all expected, the RBA has again raised interest rates by .5 in its attempt to curb raging inflation. For homeowners and investors, this is much easier to stomach than the .75 we heard about last month, but it still hurts.

Rates will continue rising until next year, at which point we expect the RBA to normalise and hopefully, we can see more certainty in both fixed and variable rates.

A question we have been asked repeatedly by new and existing clients is whether not to fix now or just stay variable and see what happens as the market starts to settle.

When our clients ask this, the answer is different for everyone and depends on their financial position. Unfortunately, many have already missed out on the sub-3% rates on offer, with the average fixed rate being 5% or more depending on the loan term.

We are starting to see lenders bring in fixed rate specials for new clients; however, nothing has been put on the table yet for existing clients. This showcases the lack of loyalty banks have for their existing customers, rather, focusing on acquiring new customers and bolstering the loan books.

If you are unhappy with your rate, now might be a great time to talk to MAW Money and check your current rate package and what’s on offer – there are no rewards for staying loyal to your bank anymore, and this is the power of a variable rate.

You can simply up and move with no penalty should you be unhappy with the service and products your current bank offers.

We also believe that lenders will start introducing some excellent fixed rate specials for two- and three-year periods to attract new business as the interest rate war heats up. Customers with low LVRs (70% and lower) will also gain access to great value rates.

Navigating this period of uncertainty can be daunting, but there are ways you can manage it to give you more certainty. One piece of advice we’ve been sharing with our clients looking for certainty is to find out what the current fixed rate is for their loan if they did decide to fix, e.g., three years at 6.09%.

We will then determine your monthly repayment over 30 years, P&I based on this fixed rate EG. $3,632.09 per month and get you to make this your new monthly repayment.

Why do we suggest this? So, you’ll get ahead on your mortgage and have stability in repayments (whilst being on a variable rate and not being locked in with the bank), and by the time the rates hit this point (which may take two years), you will have a significant buffer.

And in the meantime, we will stay in touch with you and let you know if a fixed rate special is advertised, and if it is suitable, we will secure this rate for you.

It doesn’t hurt to speak to a broker like MAW Money – we’re here to help you keep the banks honest, and we’ll try our best to get you the best possible solution to meet your short and long-term financial goals.