Six Things To Combat High Home Loans Interest Rates

Yes, we have high home loan interest rates and we could have these for a few years.

We have had high home loan interest rates before, but for many homeowners we have gotten used to the low interest rates and our spending has adjusted to those too.

So now we need to know what we can do to combat these and we have come up with six things that you can look at:

1: Fixing or Refixing Your Home Loans

Most people have all or most of their mortgage on a fix homer loan rate.

2: Extend Your Loan Term

If you have had a mortgage for a while, or if you have been paying more than the minimum then you may have your mortgage on target to be paid off in 10-years or 15-years instead of the maximum 30-years that most people start on. While we all want to stay on target to pay our mortgages off as quickly as possible, it is sometimes prudent to give yourself some breathing space and extending your loan term will lower your repayments while we have high home loan interest rates, and this allows you to keep your lifestyle while still paying your mortgage; albeit over an extended timeframe. Of course if your loans are structured correctly then you can still continue to pay the higher amounts if you can, but it removes the need to do so and therefore relieves the financial pressure.

When interest rates come down again, or as your income increases (your finances improve) then you can increase your repayments again.

Talk to one of our advisers who can make sure that your loans are structured to allow this too.

3: Refinance Your Mortgage

We often hear people say that “home loans are all the same, but this bank had a lower interest rate so that’s what bank I went with” but the fact is home loans are not all the same – some offer a lot more flexibility than others and it’s at times like this when interest rates are increasing and families are feeling the financial pressure that people start to look at their mortgages are ask questions.

4: Consolidate Your Short-Term Debts

One of the biggest drains on your budget is the short-term debts that

5: Have A Revolving Credit Account

We believe that having a Revolving Credit Account is the best way to manage your home loans, but you need to understand how it works and it needs to be managed carefully.

Most banks will suggest that you use your revolving credit for all your transactions as technically that is the most efficient way; however due to the “human nature element” in most cases we suggest that you keep your revolving credit account just for managing your home loan and house expenses (rates, insurances etc) and keep your everyday accounts separate and even with a different bank. Over the years this has proven to work better for most people as they do not see the available credit as something that is easily accessible for spending.

6: Watch Your Spending (Budget)

Okay, so it’s easy to write a budget but not so easy to keep to one!

We are not great fans of writing budgets as most of the one’s we see are unrealistic and we know that people will never stick to them for long. In our view people should manage their spending and over time try to change their spending habits but do this one step at a time.

The first thing that you should do is review what you have been spending, and once you have that information you can then review and find something to focus on. You can then find a new area of spending to focus on each month and gradually work through all of your expenditure.

For this we suggest that you get PocketSmith which is a very easy to use and affordable piece of software where you can code your expenses and monitor them over time. It has two great features that we love: (1) you can set it up to automatically upload your transactions from all of your bank accounts with multiple banks, and (2) you can go back 3-months and upload past transactions to create a great starting point.

Do You Want Help From Our Advisers?

Our advisers are very familiar with the implementing changes to help people combat high home loan interest rates.

We can review your situation and provide advice on the best options.

Often this is to stick with your existing bank, but there may be some changes suggested regarding how the loans are structured or managed. Other times it may be better to refinance to get a better loan.

If you have some short-term debts then we can help you review those and may consolidate them into your mortgage or into a better debt consolidation loan – which we have access to.

Speak to a mortgage adviser today and see if there are any changes that you can make to help combat the high home loan interest rates.

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Source: North West Mortgages