Q. I currently have a variable interest rate home loan and have been reading articles about possible interest rate rises. Should I be worried about this?
A. It can be difficult to predict when and if interest rates are going to change. Although it is good to keep an eye on what is happening in the news, it’s best to try to focus on your situation. The best thing mortgage holders can do is prepare for possible rate rises early, so that if it does happen, it will not be a huge shock to your budget. At the moment, if you find that you are able to meet repayments comfortably, then it would be a good idea to increase your mortgage repayments slightly so you can start adjusting your budget to this change.
The great thing about doing this now is that you don’t have to increase your repayment amount drastically straight away. You can make smaller changes gradually and you may not even notice the change!
By doing this now, it will not only give you time to adjust to the changes, but you will also be able to pay an extra chunk off your mortgage while the interest rates are still low.