How the interest rate rise is impacting West Australians
Did you know Western Australia is expected to be the state hardest hit by the growing interest rate rises? These hikes have left many to double down on their budgets and assess their financial incomings and outgoings now, more than ever.
The latest RBA increase was by 0.50%. This means, at the time of the publication of this article, the current official cash rate determined by the RBA is 1.85%.
As Subiaco finance brokers, we know the market and have the closest thing to a crystal ball into your (near) financial future.
Want to be educated and informed, so you can prepare for how the RBA’s rate rises might impact you? Read the latest from Nick and Justin at Sonam Capital to find out.
Reality for households with mortgages set to kick in
There’s concerns for the average Australian already pushed to the limits, as the increases aren’t expected to stop here.
Financial experts are predicting the cash rate to reach 2.5% in the latter half of next year.
What does this mean? Let’s run the numbers.
For example, home owners with a $500,000 mortgage may see their monthly repayments climb by $652 by the close of 2023.
Essentially, more West Aussies, and Australians for that matter, are coming to terms with the reality of having less to put in their ‘rainy-day fund’ and more into their home loan.
Why are the rate increases higher in WA?
The rate increases are particularly set to pack a punch in WA, but why?
It’s because at 7.6%, Western Australia already has the highest inflation rate in the country, states independent economist, Conrad Liveris.
To add salt to the wound, at the same time, our beautiful sunny state comes in last for wage growth, at a mere 2.2%.
With every problem though, comes solutions.
What you can do to prepare
Thinking ahead can get you far in life and help you tackle foreseen and even unexpected obstacles – yes, we’re talking about you inflation and interest rates!
This is precisely why you should act now to equip yourself with healthy financial habits to help you with whatever lies ahead.
Here are some good pointers:
- Create a 6 month financial plan which includes setting (and most importantly, sticking) to a budget and slashing unnecessary spending.
- Make extra payments with an offset account - This can shave time and money off your home loan.
- Clear your debts – credit cards, car loans, anything else that isn’t your mortgage
- Consult with a local mortgage broker who will assess your financial situation and help you refinance and negotiate with the banks (and other lenders) on your behalf.
Do you have to forego the smashed avo on sourdough? No. You just need to be smarter and more accountable for your expenses. Small changes can really make a difference.
Subiaco finance brokers are here to help
Interest rate rises are here, but you don’t have to fear with the right broker on your side.
The team at Sonam Capital are here to empower you through financial knowledge. We’ll take the time to get to know you and your unique situation and speak in a language you can understand, with strategies you can implement for the best possible outcomes.
Nick, Wayne and Amanda at Sonam Capital are your Subiaco finance specialists.
