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Stress-test your repayments this holiday season

Over Christmas, when the credit card often gets a workout, it’s easy for budgets to go AWOL. It can also
be a time when financial complacency creeps in. Have you ever asked, ‘what would happen to my loan repayments
if my financial circumstances changed’?

If your employment status changed, could you keep meeting
your loan repayments?

Life presents all manner of challenges –
unexpected redundancies, illnesses, a shift from full-time to parttime
work, or even a career move with a smaller salary. These
changes can impact your ability to repay your home loan and
meet other financial obligations.

How prepared are you?
Would you cope if rates rose by 2%? Find out, by using a home
loan calculator to test financial scenarios – such as what your
repayments would look like if rates rose. It’s easy to model how,
by upping repayments, how much time you could shave off your
loan, and how much you could save on interest.
Try the MoneySmart mortgage calculator now.

Where to go for help?
If you think you may not be able to meet your repayments, you
may be able to redraw extra funds from your home loan. Or, you
may be able to take a repayment holiday if you’ve been making
more than your scheduled, minimum repayments. Or, refinancing
may be a suitable option. Perhaps things are looking worse still?
It pays to start a dialogue with us as soon as possible.

Build in a financial buffer
Making extra loan payments is an ideal way to build a financial
buffer before things go into the red. Here are some tips to help
you start building your financial buffer:

Budget for everything.
Yes, everything. From clothes to bills,
healthcare, insurances and vehicle expenses. Factor in annual
cost increases, too. Take 15 minutes to sit down and write out
all your expenses – it’s a simple process, but vital to fully understand
your expenditure.

Stop paying bills late.
Late fees bite and late payments could
affect your credit record.

Get financial help.
An accountant/financial advisor can help you
plan (and achieve!) your goals with us.

Written by

Stephen Bonfield, the Managing Director, previously worked for one of Australia’s major home loan companies as an independent mortgage broker. Steve used this experience to set up his own mortgage broking company - a company that places customer needs at the forefront.

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