So the latest talk is about interest rates, and that they may be on the move up. The Federal Reserve, which is the US equivalent of the Reserve Bank, is talking rates up and some wholesale rates (the rates that the banks buy money at) have recently increased. Are rates going to increase? Probably over time, but who knows exactly when. If we go back to early 2014, rates moved upward temporarily, and the talk was that a rate increase was the next big thing. What happened? Rates fell to the lowest levels we have seen in years.
Fig 1 — Mortgage interest rates — since 1990
So what should you do? That depends on your situation. There are a number of strategies you can employ to make the most of your mortgage. It is a good idea to review your finances regularly, and ensure your mortgage is set up correctly for you. Also, test it against current offerings in the market place. See if you wouldn’t be better off refinancing. We are currently seeing quite a range in what the lending institutions are offering. Even after paying penalties, we have found some significant savings for some clients. That won’t be the case for all, but it’s certainly worth looking at. We’ll give you the data and make an informed recommendation. However, the decision is always yours!!
- Posted by Isbister
- On November 2, 2016