It’s well-known that banks and building societies profit from the interest on loans that new home owners take out, and this activity has been going on for centuries. Although it can be hard to predict these rates, it’s still entirely possible to take advantage of them – especially if you have at least a moderate level of understanding of the types of factors that govern increases and decreases.
There are several elements that can cause rates to fluctuate, including the economy, financial backing from the government and many more. If you’re keen to take advantage of these rates as they decrease, here are a few tips.
Choose the right time to apply for a loan
Throughout the year, it’s estimated that rates will fluctuate at least twice. During times of extreme economic growth or decline, these fluctuations can occur far more frequently. The trick here is to apply for a loan at the right time; when rates are low and expected to maintain that level for a fair amount of time.
Keep an eye on monthly rates as time goes by and when the percentage drops, consider applying at that time. If you are approved, your repayments will be subject to that rate and you could save yourself thousands in the long run. Even if these costs do return to normal, you could still have saved yourself plenty of cash in between times.
Think about a fixed rate loan
Although Australia boasts one of the most stable economies in the world, it’s not immune to rate increases. A good way to avoid this is by taking out a fixed rate mortgage. You might not benefit from reductions if they happen, but you will never have to worry about increases if the percentage does fluctuate.