By Brendan Turnbull
Last year (2022) was a bumpy for some borrowers as interest rates climbed consistently.
The Reserve Bank lifted the cash rate in eight consecutive months – and some of our clients told us that this left them feeling as though they had lost control of their repayments.
That’s understandable because the cash rate had not been increased since November 2010. So it took some adjusting for borrowers who experienced more than a decade of falls and plateaus.
The Reserve Bank lifted the cash rate in eight consecutive months – and some of our clients told us that this left them feeling as though they had lost control of their repayments.
That’s understandable because the cash rate had not been increased since November 2010. So it took some adjusting for borrowers who experienced more than a decade of falls and plateaus.
Where do rates go in 2023?
That’s a great question and no one can answer it with any great degree of confidence.
So, it’s better to plan in a different way.
Everyone’s circumstances are unique so we try to provide a generic outlook that gives all borrowers something to consider.
Our clients who aren’t preparing to sell are wanting to solidify their positions in these uncertain times.
The lessons from 2022 show that it’s time to take back control for borrowers to enable more certainty for whatever happens in 2023.
Most lenders are now offering variable rates in the high 4 per cents.
So, let’s work on an interest rate that sits at 6 per cent.
So, it’s better to plan in a different way.
Everyone’s circumstances are unique so we try to provide a generic outlook that gives all borrowers something to consider.
Our clients who aren’t preparing to sell are wanting to solidify their positions in these uncertain times.
The lessons from 2022 show that it’s time to take back control for borrowers to enable more certainty for whatever happens in 2023.
Most lenders are now offering variable rates in the high 4 per cents.
So, let’s work on an interest rate that sits at 6 per cent.
How does that impact your repayment plan?
Our advice is to budget on payments at that 6 per cent rate, which will ensure you’re prepared should we see the same trend with interest rates during the early stages of 2023.
With the Reserve Bank to meet and review rates five times leading into June 30, the buffer between current interest rates and setting repayments as if they were 6 per cent should give at least six months of certainty when managing your household budget.
If you can handle those repayments, you’re in a good position particularly if the current trend stops and rates level out.
Our advice is to budget on payments at that 6 per cent rate, which will ensure you’re prepared should we see the same trend with interest rates during the early stages of 2023.
With the Reserve Bank to meet and review rates five times leading into June 30, the buffer between current interest rates and setting repayments as if they were 6 per cent should give at least six months of certainty when managing your household budget.
If you can handle those repayments, you’re in a good position particularly if the current trend stops and rates level out.
The most challenging conditions have been for couples starting or expanding families.
Body clocks don’t halt for economic conditions so families have to press on.
Does someone on parental leave need to go back to work early to help with cash flow for their mortgage?
That’s where planning on a rate such as 6 per cent can help. Families can look at the numbers and decide what measures are best for them.
Body clocks don’t halt for economic conditions so families have to press on.
Does someone on parental leave need to go back to work early to help with cash flow for their mortgage?
That’s where planning on a rate such as 6 per cent can help. Families can look at the numbers and decide what measures are best for them.
For those looking to buy, banks are still willing to lend.
And we have seen success for buyers who have their deposits and finance almost ready to go. Our business continues to be a strong advocate of seeking 21-day settlements – an attractive element for sellers. The faster the seller can get their money, the faster they are likely to accept you offer.
And we have seen success for buyers who have their deposits and finance almost ready to go. Our business continues to be a strong advocate of seeking 21-day settlements – an attractive element for sellers. The faster the seller can get their money, the faster they are likely to accept you offer.
With the right level of preparation and project management, settling a purchase inside 21 days should be achievable in the majority of scenarios.
With some planning and flexibility, borrowers can be ready for whatever 2023 throws their way.
With some planning and flexibility, borrowers can be ready for whatever 2023 throws their way.