Interest rates are a big factor in each repayment and the total cost over the life of a loan, so staying on top of your current rate, as well as the interest trends across the market, is essential.
By staying on top of interest rates, you can make informed decisions about choosing a first-time home loan or getting a better rate by refinancing.
Interest rate percentages are based on a number of factors – the Reserve Bank, the cost of money on overseas markets, and the general state of the economy.
Interest rates don’t appear to move by much when looked at as a simple number, sometimes only a fraction of a per cent, but each basis point makes a significant difference to the total cost of a loan and makes a big difference when you’re working to pay down your mortgage.
If you have a $500,000 loan at 3.00%, a 0.50% increase in your interest rate to 3.50% can cost you an extra $137 per month and a whopping $49,393 over the life of the loan.
Interest rate calculators are very useful to help you compare rates across fixed and variable loans, and translate the rates into an impact on monthly repayments, loan length and the total cost of a loan.
The best way to keep on top of those movements is to stay in contact with your finance broker. They will be able to help you shop around to find the best deal when starting out or for refinancing when the time is right for you.
Sparks Finance is one of the most reliable mortgage broker in Bathurst. We can help you understand your interest rate and improve it if needed. Don't hesitate to contact us for questions.
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