Interest rates will fluctuate from time to time. At times, the changes are negligible and will have almost no bearing on your repayments but you need to look out for substantive changes. When interest rates are low, you ought to make sure that you are paying the lowest or one of the lowest interest rates. You cannot have your bank; credit card company or other lenders keep your interest clocked at higher rates when the central bank has already lowered the lending rates.
- If you have a fixed rate of interest on your mortgage, then it would be advisable to change to an adjustable rate before you can benefit from the reduced rate of interest. If you already have a floating or adjustable rate of interest, then you can find out if it has been reduced to the extent it should have after the rate cut. It is imperative that you try to make the most of the period when interest rates are low as they would not remain low forever. They will be increased in the future and your interests, hence your repayments will increase.
- There are many ways you can take advantage of low interest rates. You can consider fixed rate options when the interest rates are low. That will help you to fix the low interest rates for a certain number of years. This can save you a ton of money. Many people wait for such times when rates are low to borrow money and they opt for fixed rates.
- You may wish to review your existing loans. You can consider switching to a cheaper mortgage or you can always opt for any provision of transferring a loan to a lender that charges a lower rate of interest. Refinancing and revising your repayment can be another solid option.
- Lower rates of interest provide the perfect opportunity to reduce your debts or to be completely free of debt. You can repay quickly, make lump sum repayments or you can try to repay as much as is possible so you have little to repay when the rates spike up again.
As always we recommend speaking to your YFG Lending specialist to guide you to the best strategy for you!
