Interest rates have increased 0.25% and now there’s talk of possibly another rate rise before the end of this year or early next year. Today, the Reserve Bank of Australia (RBA) issued their Statement on Monetary Policy which suggests that the RBA has a “strong tightening bias”. They have estimated inflation to be around 3% by the end of 2007 and to stay at that level until mid 2008, which means there may be even further increases throughout 2008.
Managing mortgage repayments during time of increasing interest can be very difficult, especially considering your salary doesn’t increase at the same level as the repayments do. Here’s a couple of suggestions that may help you better manage the situation:
Negotiate a better rate
The published variable interest rate is not necessarily the best interest rate available. When I was shopping around for a loan for an investment property early in the year, Commonwealth Bank, Westpac and National Australia Bank all started by offering their standard published variable rate. Once we discussed the options further and I advised that we were talking to a number of banks, they all started...
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