Lorraine Cooke

2008 in the market.

So people who are on tracker rates now have, you know, should have lower balances in terms of their, you know, the amount that they borrowed because obviously they took that mortgage out maybe in the early 2000s.

So when they took that out and interest rates did increase in 2008, they would have had much higher interest

monthly mortgage repayments on a higher balance.

Now they have lower balances.

So the impact of it shouldn't be as bad, particularly when the interest rates increase.

If they have the capacity, because it lessens the amount of interest then that they pay.

So an awful lot of people are saying, oh, I've come off my tracker rates because I can't afford it.

But yet they might have money, let's say, for example, in a deposit account not earning them any interest.

So the suggestion might be, well, look, if you overpay it, whatever amount that's possible from a cash flow perspective, that you are actually effectively paying less interest because you're hitting the capital balance.

the amount that you owe, and the interest is recalculated on that on a daily basis.

It is, definitely.

Get a valuation done on your property, just to see, or even just check the price register for properties that have sold in your area recently.

And then you can have a look at the banks, the offerings, and see what...

rates are available based on loan to value.

Like, for example, if your loan to value is less than 60% at the moment, there is a rate currently at 3% available.

So people who are on rates that they would have locked into maybe four or five years ago, they might be on 1.95% to 2.5%, for example.

So yes, they will be going to a higher rate, but the average rate out there at the moment is around about 3.5%, but that's not going to be for much longer if the banks do pass on any rate increases.

So it's definitely worthwhile to check that out to see if you can lock in, for example, to a 3% rate.

Also check your BEO rating of your property.