(Darwin Capital City Daily)

Given the outlook for further rate rises, we have provided some handy tips.

Refinance
If you paying a standard variable rate you should consult a mortgage broker to see how much they might be able to save. For example, Ben Just of Aussie, the mortgage broker, says that the Commonwealth Bank standard variable rate will move to 8.57 per cent. If a borrower switched to CBA’s basic variable rate at 8.06 per cent, they would save $107.80, based on a $300,000 mortgage, with repayments falling from $2321 a month to $2213. But switching may incur costs of several hundred dollars in fees.

Take a fix 
Fixed rates may no appeal to everybody. But they can make sense, especially in a rising rate environment and even more so if you are already struggling to meet your repayments. Ivan Karamatic of X-inc, the mortgage broker, said: “If another 1 per cent or so on top of your existing rate would really hurt you, then you should fix because it might make the difference between keeping your home and losing it.” Fixed rates are available from about 7.49 per cent for three years. One of the criticisms of fixed rates is that they lack the flexibility of variable deals. But many fixed-rate mortgages do allow borrowers to overpay, by 5 or 10 percent a year -they just don’t allow borrowers to take the money out.

Savers
People who rely on their savings may well be welcoming interest rate rises, especially if they have paid off their mortgage. However, people should think twice before plumping
for the highest rate term deposit they see advertised. At the moment the bestpaying
instant access accounts and term deposits are paying about the same.

For more information on X Inc Finance and home loans, go to http://www.xinc.net.au/