Here’s what 2017 will mean for your mortgage
SIX years of falling home loan interest rates look likely to come to an end in 2017.
As a growing number of economists and other forecasters believe the next interest rate move will be up, homeowners are facing more mortgage uncertainty than they have in years.
The Reserve Bank of Australia has cut interest rates every year since 2011 but in recent weeks banks and other lenders have been increasing fixed and variable rates independent of RBA moves.
People with mortgages are being urged to check their interest rate, shop around, and in some cases consider fixed rates, which are climbing more than variable rates amid expectations of higher inflation and higher interest rates globally.
Financial markets have been pricing just a 10 per cent chance of Australia’s official interest rates falling further this year, but a 63 per cent chance of a rate rise by February 2018.
HOW TO SAVE MONEY ON YOUR MORTGAGE IN 2017
1. Check your rate. For many people a mortgage is set-and-forget but intense competition between lenders is delivering good deals. Seek a rate below 4.5 per cent.
2. Be prepared to haggle — your lender is unlikely to offer a better deal unless it thinks that you are going to walk.
3. Consider a fixed rate, if you have a need for certainty and also understand the limitations of fixed rate mortgages.
4. Pay a little extra off your mortgage every pay. Just $10 or $20 each week can save thousands of dollars in mortgage costs over the life of the loan and shave years off its length.
5. Keep an eye on economic news, as rising inflation Australia — and also the US — will be triggers for future rate rises.