HOW DO INTEREST RATE CHANGES AFFECT YOU?

At its meeting today, the Board decided to increase the cash rate target by 50 basis points to 1.35 per cent. It also increased the interest rate on Exchange Settlement balances by 50 basis points to 1.25 per cent.

Interest rate rises can be tough for families and small businesses, as increased mortgage and debt repayments can make life more difficult and expensive.

For many Australians, a rise in interest rates will mean increased repayments on mortgages, loans, and credit cards. With rising interest rates, comes rising day-to-day costs. This means money that may have been disposable, becomes less disposable. Time to get comfortable with knowing exactly what you are spending and where you are spending it.

When reviewing your finances, make sure you look at how interest rates are tracking and if necessary, consider setting yourself up for further interest rate rises.

Due to rate rises, any preapprovals will need to be looked at and re-submitted due to the affordability of the current rises. This is something as a first home buyer you don’t want to hear. For more information about your options, contact your mortgage broker to discuss your personal situation.

Phoebe x