How will changes in interest rates impact loan repayments?
As a first home buyer or investor you should factor in the impact a change in your interest rate can have on your loan repayments. Even if you are upsizing or refinancing it's important to understand the impact a change in rate could have.
If you take an average loan in Brunswick or Coburg of $400,000 and interest rates rose by just 0.5%. Over a year that equates to $2000 ($167.00 per month) extra interest. Now for some of you an extra $167.00 per month may not seem a lot, but if it's your last $167.00 it becomes a big deal.
If you cold reduce your current rate by 0.5% that would also save you $2,000.00 over a year on $400,000. How many days do you have to work to have an extra $2,000 in your hands?
You can use this calculator to see how changes in interest rates will impact you.