It’s safe to say we’re all living through a global financial shit show.

Stock markets are echoing 2008-2009 vibes, the cost of living is increasing beyond our wages and property prices have finally made their turn from their ridiculous peak back in 2021. 

But we’re not done yet: the cherry on top for the everyday punter are the relentless interest rate rises.

There is some good news, it’s called refinancing.

First Up - Interest rate rises are around the corner.

If you made your repayment in September and thought “Shit, that hurts” - Warning: The interest you paid wasn’t your new interest rate.

It was based on August’s rate rise, and there’s still two more to come.

Why?

So far, the RBA has raised rates by:

• 0.50% in August
• 0.50% in September 
• 0.25% in October

And this is how it works from the RBA, to the bank, to you:

• The RBA announcements are made on the first Tuesday of each month. 
• Banks generally don’t increase their rates until the 15th-20th of the month (Depending on the lender)
• Your new interest charges don’t start until late in the month. 

Put simply: Your interest rate is going to keep going up because there’s a delay between the RBA, your bank and your repayment date.

What’s Next - How to prepare for rising interest rates

I'm not trying to be a bearer of bad news. Rates are going up for all of us. But there are a few ways to combat at least a portion of the pain coming your way.

We have found that by either refinancing or repricing with your existing lender will reverse at least one of the 0.50% rate rises if you haven’t reviewed your loan in the past 12 months. We've wiped over 1% off of some clients' interest rates, taking them back to August or even July's interest rates.

The reality is that the choppy waters will remain in place for at least the next quarter and possibly into the middle of 2023.

Considering the GFC recovery was over 2.5 years, my opinion is that we’re nearly 1 year into the reset of markets. I think 2024 will bring a more optimistic view of how things look but for now we need to all reposition ourselves as best we can to get through this period.

Everything is temporary and it will pass - we had an exceptional 10 years, and we should be grateful for that. Now it’s time to take action and make sure you are in the best possible position to make it through so that you can enjoy the gains on the other side. 

All the best,

Sean

‍