“Change is the law of life, and for those that only look to
the past or the present, they will miss the future”
2008 will no doubt go
down in history as one of the most severe financial crises in the modern
economic era. Whilst we have all felt the impact I believe that we are through the “perfect storm”
and we can now look to the future and enjoy some calm!
GOOD NEWS:
Over the last four
months we have seen the Reserve Bank of
Australia
reduce interest rates by a whopping 3% and the
general consensus amongst leading economists is that we can expect further
interest rate drops. Although the banks have not passed on the full reductions,
what has been passed on to mortgage holders has still been significant for home
owners with variable mortgage rates.
These rate drops are
welcome relief to many and to many an opportunity to reduce the overall term of
your loan and benefit from significant interest savings!
Some food for thought
Example 1 Example
2 Example 3
Loan Amount $300,000 300,000 $300,000
Interest Rate 9.41% 6.91% 6.91%
Loan Term 30 Years 17 Years 1 Month 14 Years 7 Months
Monthly Repay $2503 $2503 $1250 (fortnightly)
Interest Paid $602,963 $211,938 $175,740
The three examples above are very
generic in nature and do not include the impact of fees and other costs
associated with most loans.
Over the next few weeks when you reflect on 2008 and do
some planning for 2009 we encourage you to give us a call to assist you in
reviewing your current financial position regarding your mortgage and/or
outstanding debt.
Yours Sincerely
Clint Paton
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