John Rolfe: Rate rise anxiety? Take a breath, then take action

Interest rates are heading up, possibly by a lot. If that makes you queasy, do what I did, advises John Rolfe.

Interest rates are heading up, possibly by a lot. If that makes you queasy, take a breath – then take action.

Getting a loan with an interest rate near 2 per cent is possible. I know this because we have one.

We got it by changing lenders.

In our experience, changing lenders is not a lot of fun.

There’s a heap of paperwork to do. Plus you lose the comfort of sticking with what you know.

Interest rate rises may cause anxiety if you have a mortgage, but there’s no reason to fret.

But lying in bed worrying about your next repayment is far less fun.

And sticking with what you know is not smart if your lender is sticking it to you.

We found there were two positive side effects of getting serious about changing lenders.

One was being forced to have a more forensic look at household expenses. That process led us to cut out some waste.

The second was that our existing lender offered a much better rate than anything it had previously been willing to put on the table.

We could have stayed with them and been much better off than we had been.

News Limited journalist John Rolfe from The Daily Telegraph in Sydney.

But the new lender’s offer was still much better, so we followed through on our threat and left.

It must be said that the lowest interest rates are usually only available to people who have at least 20 per cent equity in their home (meaning the loan to value ratio is below 80 per cent).

But even if you don’t, there are substantial savings to be had.

Changing lenders is well worth the effort.

I encourage you to consider doing it.