It's time to put a plan in place!

If you took advantage of record low interest rates in 2020 and 2021, it’s time to put a plan in place to manage what could be a significant change in your home loan repayments upon expiry of your fixed rate loan.

What happens when your fixed rate loan expires?

Your interest rate will revert to a variable interest rate and as a borrower who took advantage of historically low interest rates your interest rate may increase by between 2 - 3%.

On a $500,000 loan 30-year loan, a 3% increase in the interest rate will result in a monthly repayment increase of approximately $836.*

On a $300,000 loan 30-year loan, a 3% increase in interest rate will result in a monthly repayment increase of approximately $491.*

So how can you prepare for a change in your home loan repayments?

Step 1. Understand what your home loan repayment will change to.

Do your research understand what is ahead - what will your rate and repayments will move to?

Step 2. Identify if a gap exists between your current repayment and the new repayment.

Many of our clients already pay over and above the minimum monthly repayment applicable to their loan. In this instance, your current monthly repayments may already cover an upcoming increase.

Step 3. Start preparing for your new repayment.

Review your discretionary spending. Consolidate your personal debt. Start mirroring your new repayments by either increasing your current repayments if your fixed rate loan allows or compartmentalise the upcoming increase in your loan repayment in an offset or savings account.

What’s next?

If you require support or guidance please call the FinancePath customer service team on 1300 780 440 or email customerservice@financepath.com.au.

The team will make sure you are ready and prepared for what happens when you reach the end of your fixed loan term and together, we can map out your future finance path.

* Repayments and interest rates applied will vary dependent upon each client’s individual circumstances.