Do you have loans that come off their fixed terms this year? It might be time to consider the way your total lending portfolio is structured, says Michael Cave.
The right structure can save you money, give you more flexibility and prevent big shocks when rates increase.
“Go through a broker,” says Michael. “The banks do have some margin, so you can get a sharp rate and cash back as well, if you are wanting to shop around and refinance, even without shifting banks.”
Banks are currently trying to move investors off interest-only debts, so this may increase the cost of your borrowing, particularly as rates are rising. Using more than one bank can give you more options, Michael says. Consider what your plans are for the next six to 12 months, he recommends: “Do you plan to renovate or are you going to get a bonus or a pay rise? You might want to have some money on a flexible facility, or split your loans across several fixed terms so it balances out as rates change.”
Deciding whether to fix or float can be tricky – but fixed rates have the advantage of giving you some certainty in uncertain times.
“Change is here to stay,” says Michael. “In uncertain times, control what you can, for your financial and mental wellbeing.”