What does a record low interest rate mean for you?

With a record low cash rate of 1.75%, there has never been a better time to make serious inroads into paying off your home loan sooner.

Low interest rates also means good news for investors or people looking to enter the property market.

low interest rates

Over the past 6 years, we have seen continual drops in interest rates. The last interest rate rise was back in 2010, thankfully the current situation is far removed from the days of the 80’s and 90’s where rates were at a crippling 17% – 18%.

For home owners, a simple strategy to pay off your home loan quickly is to keep your repayments at the level of the previous interest rate rather then decreasing your repayment in line with the lower interest rate. By maintaining your repayments on the higher rate, more of your principle is being re-paid, saving you thousands in interest over the term of the loan.

For investors, a lower interest rate means lower interest repayments potentially making your property positive in cash flow. This gives you the ability to acquire new property with a new loan at a much cheaper rate than it was a year ago having the benefits of positive cash flow on top of capital growth. Using the rental income from your investments to reduce the balance on your home loan is a positive move in paying of your loan sooner, releasing more equity and allowing you to purchase additional investment properties.

At present, we are able to secure rates from 3.74%, with an additional cash rebate of $1250 for each property / loan you refinance. For example, let’s say you have a total of 4 properties, this equates to $5000 cash back in your pocket on top of the additional interest rate savings.

There really has never been a better time to review your loans. Let’s talk.

Contact Chris or Laura on 08 84317444 or email answers@businessi.com.au


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