With the projected interest rate rise of 1% or more in the next 12 months for a 30-year fixed mortgage, you’d be paying $100,000 more in interest over the 30-year life of a $400,000 loan for example.
Shocking to say the least, but you can breathe a sigh of relief if you know how to stay ahead of the interest rate curve and avoid the consequences of rising interest rates. That’s precisely what Lesley Parker has written about in an Australian news article in the Sydney Morning Herald.
He used the advisory of Damian Smith, the chief executive of RateCity.com, a comparison website, who says that one way borrowers can save 0.7 percent interest is by shifting from variable to fixed rates and locking in now before either rates rise.
The article cites other ways of beating rates rises like negotiating with lenders, accelerating repayments, consolidating high interest debt on credit cards, for example, into your lower-interest home loan, in addition to refinancing.
On top of all these, be a low-risk borrower to take advantage of the shift in thinking by lenders who offer discounts to people with more backing. This means you have to save big and borrow small.