They say all good things come to an end. A summer vacation, off-key karaoke singers, and a fixed interest rate on your home loan. If your fixed rate term is nearing an end, now’s the time to plan ahead.
If you locked your home loan into a fixed rate in the last few years, chances are you’ve enjoyed great value on your loan rate. But crunch time could be around the corner.
A string of Reserve Bank rate hikes since May 2022 means you may need to adjust to higher rates once your fixed term ends – even if you choose to re-fix in the future.
‘Be prepared’ is every boy scout’s motto, and it’s worth taking a leaf out of their book. Planning ahead and taking steps to prepare for when your current fixed rate ends can smooth the transition to higher rates.
Here are three ways to set yourself up for the future.
Pay down more of your mortgage today.
The best defence is a strong offence, right? And your best line of offence when rates are rising is to pay down more of your loan while you’re still on a low fixed rate, if possible.
If you’ve got some spare cash, consider channeling it into your loan. It can help you save a bundle on interest further down the line.
Your ME fixed rate home loan lets you make up to $30,000 in extra repayments per fixed rate period at no extra charge
The more you repay today, the less you pay in interest tomorrow.
Blitz the budget to find extra cash.
Full marks if you’re already budgeting. If you’re not, now could be a great time to start.
Why? Because along with interest rates, living costs are also rising, and it’s important to get more from your money.
Beat the squeeze before your fixed rate ends with our top budget tips to help you save on household expenses. Use the extra cash to pay more off your home loan or grow a war chest of savings to help manage loan repayments when your fixed rate ends.
Budgeting can be a breeze with apps like Frollo or MoneyBrilliant. Or head to our Budget Planner and let it do the sums for you.
Crunch the numbers. Know where you’re heading.
Knowing how much you can save by making extra repayments on your home loan if you switch to a variable interest rate loan can help you stay motivated – and plan ahead.
Jump onto our home loan repayments calculator to get a clear picture on how much you can save by paying a bit extra into your home loan.
Play around with the numbers to find the extra repayments that suit your budget. It’s an easy way to see how even small extra payments can have a big impact on your loan over time.
We’re here to help.
Goodbyes are never easy, and if you’re unsure about what happens when it’s time to farewell your fixed rate, we’re here to help.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.