Are you MAXIMISING the impact of Low Interest Rates?

With interest rates for 2016 remaining at historic lows, and many financial analysts predicting little change in the first half of 2017; it is certainly time, if you haven’t already done so, to ensure that you are benefitting via any loans you have around your property portfolio.

The FIRST step is to do a health check on your complete suite of loans – many people get a little complacent in a low interest rate environment, as they are already paying less than previously; however, you’d be surprised to find out how much more you could be saving.  Banking and finance is an extremely competitive industry and your business is valuable – shop around and get the best deal. Don’t be afraid to haggle with your existing lender(s), they may meet or exceed what you have been offered elsewhere to retain your custom.

If you can afford it, repay extra off your loan by gearing your repayments now as if rates were higher.  Not only will you save on interest and build equity faster; any future increase to interest rates shouldn’t cause any consternation to your budget or stress levels.   This will shorten the time of your loan and save you significant money.

Create an offset account.  Offset accounts basically sit “beside” your mortgage so that any savings inside these accounts is included as a credit against your loan which in turn reduces the amount of interest you pay.  Paying interest on the differential saves you thousands in interest and shortens the time of the loan term.

Consider Fixed Rates options, in this low interest rate environment if you have a significant property portfolio that carries a large debt, you may want to lock in some of your loans, or a portion of your loan(s) for 3-5 year periods at some very attractive rates on offer, well under 5%. Once again, rates vary from institution to institution, shop around and bargain with the banks!

Finally, don’t take on bad debt.  Avoid borrowing for assets or activities that don’t generate wealth, for example, a boat, new car or holiday.

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Shop 1, 2 Brisbane Road
Mooloolaba QLD 4557

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