If your fixed rate mortgage term is coming to an end and the switch to variable rates is looming, you may be feeling quite worried about how your budget will cope.
Borrowers with a $750K mortgage are paying on average a hefty $1,900 per month more than they were in May last year. Coupled with rising inflation, many home owners are certainly feeling the pinch right now.
Perhaps you’re considering selling your Melbourne home and downsizing. This may be the best option if your family income is maximised and you can’t see your circumstances improving.
But in a recent article by ABC News, experts from the financial sector suggested ways in which home owners transitioning to variable rates can potentially lessen the impact before resorting to selling their homes.
Their first suggestion is not to wait until you are struggling to meet your mortgage payments or you’ve actually fallen behind, but to get in touch with your lender early if you anticipate financial hardship. By waiting until you’re actually in arrears you can negatively affect your credit score which may impact on your borrowing ability for future properties.
So if the pending switch to a variable rate is worrying you, speak to your mortgage provider about the options available to you. It may be that you can:
- refinance your loan with another lender,
- argue for a better interest rate,
- extend your loan term to reduce your monthly payments,
- switch to interest-only payments for a period of time.
If you do decide to sell, using a vendor advocacy service can help to ensure you get the best possible price for your Melbourne home.
Chamberlain Property Advocates recognise the challenges that home owners are facing in today’s market. Let us help you sell or buy at the right price.
If you’re planning to sell, talk to us about our Vendor Advocacy Service helping sellers achieve outstanding results.
To book a free 20-minute consultation, simply click here and choose a time convenient to you.
