3 ways to make the most of low interest rates

1. Fixed rates from 2.19% – time to refinance

Save money while you try to save your sanity. Refinancing makes sense right now because it can be done via video with your broker and it’s one of those jobs people tend to put off. For example, a customer’s mortgage payments could be reduced by $2,532 per annum ($211 per month) where they have a $400,000 loan and a current rate of 3.19%.

2. Pay off your mortgage faster

Refinance to reduce your interest rate, but instead of repaying less, continue to repay the same amount while on a weekly basis – you’ll pay off your mortgage a lot faster.

For example, if you refinance to reduce your repayment amount by 1%, but continue to repay the same amount and on a weekly basis, you’ll save $100,000 in interest and pay off your mortgage 5 years earlier.

3. Look at investing as demand for rentals is high and supply is low

Rental returns against a backdrop of very low interest rates is encouraging investors to get into the property market.

Melbourne has a low vacancy rate at 2.3% and a median rental amount for houses of $480 per week (REIV March 20). With an interest rate of 2.88%, on a loan of $350,000, your repayment would be $334 per week over 30 years. Plus, an investment property could create a positive income stream, potential tax benefits and potential capital growth.

Our commitment to exceptional customer service remains unchanged, so please do not hesitate to talk to one of our sales consultants about finding your dream home. If you have any specific questions or concerns about finance, you can contact Resolve.

All calculations are hypothetical scenarios and do not take your personal circumstances into account. All calculations by Resolve Financial Solutions Pty Ltd ACL 385487 using MoneySmart calculators; for calculator disclaimer and assumptions go to moneysmart.gov.au/home-loans/mortgage-calculator.

Article written and supplied by Resolve Finance.