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What are you going to do if your low fixed rate home loan expires this year?

There are billions of dollars of fixed rate residential home & investment loans expiring before December 2008. This could mean a 2-3% increase in interest rate. On a $300,000 loan a rate increase of 2% equates to a payment increase of $500.00 per month, and 3% $750.00 per month.

What are you going to do if your low fixed rate home loan expires this year?

What options do you have?

(1)Plan for the fixed rate expiry BEFORE it happens.
Don’t hide from the increase, and if you are hiding from this due to stress, embarrassment, fear, or ignorance begin preparations now. See an expert you may be surprised about what small changes you can make in your spending or loan structure that would have a positive financial impact. It’s best to begin this planning 4-5 months ahead of time.

(2)You could switch your loan to interest only.
This should only be for a short while and not a long term solution.  

(3)You can take a 3 month loan repayment holiday.
This is a band aid it does not solve the issue, but if circumstances change and you absolutely can’t manage this is a good options to try while sorting out a new financial plan.

(4)Restructure your Consumer debt.
You may be able to reduce payments on other forms of consumer debt, through a debt management plan or debt consolidation. The extra funds can then go towards the home loan increase

(5) If you’re an investor, you can increase the rents on the property.
If all other landlords are doing the same thing, the chances are you will not lose the tenant by doing this.

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