resi mortgage corporation pty limited ABN 61 092 564 415
Level 3, 458 Wattle Street, Ultimo NSW 2007
Tel 02 9280 0007 Fax 02 9280 0009 E-mail save@resi.com.au PO Box 12 Broadway, NSW 2007
MEDIA RELEASE
NOVEMBER 3, 2009
PROTECT YOUR POSITION AS RATES RISE
Resi Mortgage Corporation says today’s announcement by the Reserve Bank of another successive
rate rise will now lead more borrowers to move to protect their financial position and prepare
accordingly for the new rate cycle ahead.
Resi’s Head of Consumer Advocacy, Lisa Montgomery says although this rate rise may only add
around $46 to monthly repayments on an average $300,000 loan* - which in isolation seems a
manageable figure, the effect of these rate rises will compound significantly as more occur.
She says: “Although $46 may seem a relatively easy figure to process now, its feasible that in the
next six months those borrowers may have to find an additional $200 per month for repayments from
somewhere within their household budget - and that’s the scenario they should be focusing on.”
Montgomery says each category of borrower including owner occupiers, investors and first home
owners should be looking at financial strategies to protect themselves - if they haven’t already done
so.
She says: “During the decade prior to the GFC, even when interest rates were rising, Australians
were spending like never before – but thankfully there now seems to have been a shift to borrowers
being more aware of the implications of their spending and the options available to them.”
“However, despite this trend, it is inevitable that there will still be some who will be caught short as
more rate increases occur and as with planning for anything - protecting your position is the key.” she
adds.
Montgomery says for many mortgage holders, now is a good time to do an audit of their home loan
and its features and determine whether it is still providing them with the flexibility they may need in
the future.
“It’s a good time to see if you can negotiate a better rate with your lender and if that’s not possible,
consider shopping around for a lender with a more valuable service proposition. This even applies to
first home buyers who are considering different home options – don’t just buy the loan, buy the
service as well,” she says.
Montgomery says in the current climate of rising rates there are several things that each category of
borrower should also consider:
OWNER OCCUPIERS:
Always allocate more funds for your current mortgage repayments which will give you
breathing space for rate rises, as well as providing a slush fund for any necessary works you
may have to carry out on your property.
Limit discretionary spending, particularly during the festive period when budgets can blow out.
FIRST HOME BUYERS:
Hold off on purchasing everything new to go with the new house and instead acquire
household items as you can afford to pay for them – preferably in cash. Don’t rack up
additional debt if you don’t need to.
With rental demand still high and provided your living circumstances allow for it, consider
taking in someone to rent a room and help you pay your mortgage.
resi mortgage corporation pty limited ABN 61 092 564 415
Level 3, 458 Wattle Street, Ultimo NSW 2007
Tel 02 9280 0007 Fax 02 9280 0009 E-mail save@resi.com.au PO Box 12 Broadway, NSW 2007
-2-
INVESTORS:
Don’t take it for granted you will always have tenants to help you pay the mortgage – have a
plan B ready in case the property is untenanted for any period such as having funds set aside
to continue paying the mortgage or moving in yourself if your situation allows for it
Remind yourself that repairs and maintenance costs are a necessary part of owning an
investment property so allocate for them in your annual budget and remember they are tax
deductible and will over the long term add value to your property.
*
Monthly repayment figures based on an average $300,000 principal and interest standard
variable loan taken out over 25 years
ENDS
Media Contact:
Lisa Montgomery, Head of Consumer Advocacy,
RESI Mortgage Corporation: (02) 8204 5012 or 0414 592 553
Karen Bristow - Kardan Consulting: 02 9967 3245
NEWS 
