Mortgages, Banks and you… The 3 are all linked but how?

Interest rates are starting to increase, why is this happening?

Managing debt is an important part of any financial plan for success, for those of us with mortgages, Interest rates have been very low for a very long time now but just last week we saw Westpac announce they were raising their interest rates and this was quickly followed by the other major banks.
The reason the Banks are saying rates need to rise is that they are pointing to new capital requirements to ensure we have the safest banks in the world which you would imagine is a good thing. This is partly the truth but not the whole story…

What banks are not telling you is that they could have done that without putting up interest rates, this though would have meant not paying as high a dividend to their shareholders?
Something very important to understand, your bank does not value the loyalty of their lending clients or for that matter their customers with cash sitting in the bank in term deposits, they are influenced mostly by being loyal to their shareholders and you should learn to use this information to your best advantage.

You as the consumer can dictate the terms of your loan with your bank, it’s worth investigating to see what your bank can do to ensure you are happy and not become a loyal customer of another bank, if nothing can be done then you can vote with your feet.
If you don’t feel confident to do this then it is time to review your mortgage with a mortgage broker. It may be time to consider locking into a fixed interest rate or to stay on a flexible rate. Importantly, a review could save you thousands so it is worth checking to see how you could be better off knowing this important fact with your broker or call us to see if we can assist.
Write to us with any topics you would like discussed and contact us for your free copy of our book on Money.
Marc Bineham is the managing Director of Noall & Co ( His advice is general and readers should seek their own professional advice before making financial decisions.


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