Tips on buying home when interest rates are low

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Transcription

Announcer: Your family’s number one, it’s 96.5 on this Wednesday evening and it is that time of the week where we catch up with our finance expert, Helen Baker. Hey, Helen!

Helen: Hey, how are you doing?

Announcer: Good thank you, now last week we talked interest rates, but you’ve got some more information and more tips for us when it comes to the interest rates going down. What are they?

Helen: Yeah, I thought I’d talk about a different one tonight and that’s really about the promotion that’s out there at the moment to say, look, go and buy these houses because interest rates are so low and it allows people to get into the market that probably couldn’t before. And that’s fantastic in one sense, but people also need to realize the old phrase, what goes up must come down and vice versa.

So there would come a time down the track where you think those interest rates will go up, and they might go up quite fast and that’s when you find people starting to get in over their head because those increments start to be quite insurmountable increase on increase on increase.

So if you are going out to buy a house, or you’re looking to upgrade your house, why not a do a calculation, or get the mortgage broker to do a calculation on an interest rate that’s got even maybe 2% on top of the current interest rate so that you’ve got a buffer in there, so that if interest rates do go up down the track, you know you won’t be forced to sell your house but in the meantime you can start paying down that mortgage as if you had that extra 2% interest on it and then you’ll be disciplined to stick to that and you’ll end up paying your home loan off much quicker.

Announcer: Ah, see, you are that woman of wisdom when it comes to all things finance. Thank you very much, Helen.

Helen: You are very welcome.

Announcer: Now, if you want to find out more, then go to OnYourOwnTwoFeet.com.au.