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Mortgage interest rates and managing cash flow


Following the latest rise of the official interest rate by the Reserve Bank of Australia, many people are considering their mortgage repayments; and the impact that further increases and the end of many fixed rate mortgage periods will have for homeowners in 2023.


The team here at Hub Advisory Group recently met with Connor Perry, Senior Finance Strategist from Money Links. He ran us through some figures on the impact of increasing interest rates and moving from a fixed to a variable rate – with some examples below.


$600,000 home loan over 25 years: Fixed Rate: 1.89% - $2,511 per month Variable Rate: 5.50% - $3,685 per month ($1,174 per month increase) Researched Variable Rate: 4.11% - $3,204 per month (only a $693 increase from their fixed rate if proactive and search for a competitive rate).


$1,000,000 home loan over 25 years: Fixed Rate: 1.89% - $4,185 per month Variable Rate: 5.50% - $6,141 per month ($1,956 per month increase) Researched Variable Rate: 4.11% - $5,339 per month (only a $1,154 increase from their fixed rate if proactive and search for a competitive rate).


We appreciate that rising living costs and the added pressure of increasing interest rates can make managing the family budget stressful. That’s why we want to remind you of the importance of being proactive about your finances – and to research lending providers to ensure you are receiving the most competitive interest rate available to you.


There are also a few ways that Hub Advisory Group can help you to better manage your personal cash flow. These include:

• Setting up a budget that takes into consideration your lifestyle

• Structuring bank accounts to ensure essential expenses can be met

• Using our cash flow tool to analyse expenses and visually outline what are the larger expenses as well as highlight those higher outgoings which may not be essential or a priority

• Debt repayment strategies


So, if you’d like to discuss your personal financial situation and look at some cash flow solutions as we move into the new year don’t hesitate to call (02) 4926 8000 to book an appointment.


And, if any of your friends or family are concerned about:

> Personal cash flow and debt management

> Rising interest rates, or what moving to a variable rate means for their mortgage


Don’t hesitate to share this information with them too – located at 275A Hunter Street, Newcastle – we’re here to help.


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