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Rate rise: how to save your home

By ninemsn staff
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Air date: Tuesday, February 5, 2008
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Homebuyers have been slugged yet again (AAP)

By ACA staff

Homebuyers have been slugged yet again, with the Reserve Bank of Australia lifting official interest rates for the 11th consecutive time since 2001.

With the central bank signalling there may still be further increases to come, Australian families are certainly feeling the heat.

In a special report to be broadcast tonight at 6.30pm, A Current Affair speaks to home loan experts to find out what Aussies can do to ease the rate rise pain.

Here are their tips to save your home:

JOHN SYMOND, AUSSIE HOME LOANS
  • Check your mortage, another lender may be offering a cheaper interest rate.

"Our research shows that over 50 percent of people who look at their home loan … find that it pays them to switch loans."


ANITA BELL, FINANCE WRITER
  • Consider buying shares in your bank.

"Refinance now, consider buying shares in the bank that you are going to be dealing with in order to get discounts on interest up to 0.7 percent."

"If you are in really severe financial strife then consider your superannuation policy because remember that at any age if you are in severe financial stress your superannuation policy is a place you can assess as a last resort."


MARK BOURIS, WIZARD HOME LOANS
  • Shop around, but don't rush in to fix your rate.

"Currently the fixed rates are very close to the variable rates — the premium is so high — which sort of indicates lenders believe interest rates will fall towards the end of this year."


PAUL CLITHEROE, FINANCIAL ANALYST
  • Don't just consider the mortgage, look where else you can save.

"You've got to come back to basics and what money is all about for an individual or a family: what do I earn, where am I spending money and where can I make savings."

"I'm meeting people who are paying 24 percent on a couch or a stereo they bought two years ago … We can consolidate this 24 percent piece of debt into something that is a third of that rate so we can use those savings to help meet the mortgage repayments."


Watch ACA for the full report, and more essential tips including:

  • Don't lock into a fixed interest rate.

  • Redo your budget and look for other areas to save.

  • Consolidate your other high interest debts.

  • If you are in trouble — talk to your lender.

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