Westpac forecasts higher interests rates: Borrowers warned to brace for higher repayments
Monthly repayments could soon cost borrowers a lot more cash if Westpac’s predictions for rate rises do come to fruit...
Borrowers have been urged to pay off their mortgage early, get their debts under control and broaden their knowledge of investment options.
The Australian Securities and Investments Commission (ASIC), which is also the government agency responsible for financial literacy, said Australians could save thousands of dollars by repaying their mortgage ahead of schedule.
“About one in five Australians who save money do so by making extra payments on their mortgage,” according to ASIC.
“For example, a couple with a $400,000 mortgage could save around $50,000 and pay off their debt almost four years earlier by contributing $200 extra monthly.
“The best way to take advantage of making extra repayments on your mortgage is to act early, especially when interest rates are historically low, as they are now.”
ASIC also said that consumers should take control of their debts, such as their credit cards.
“A debt of $2,000 could take you over 12 years to pay off and cost about $2,150 in interest if you only pay the minimum repayment,” ASIC said.
The regulator also urged Australians to review their insurance, become more knowledgeable about their superannuation and consider protecting themselves through diversification.
“The aim of diversification is to reduce the risk of losing money, so that if one investment produces poor results or is completely wiped out, you still have other investments that may offset the loss or at least save you from losing everything,” ASIC said.