It has been reported that while the nation's overall credit card debt that attracts interest charges has dropped 11% in the past four years, our overall credit card debt has reached a record high of $52.2 billion in 2016 and is climbing! While interest rates across home loans remain relatively stable at reduced rates and remain for the most part well below 5% and lower, the standard credit cards charge interest rates near 20% per annum. Personal loans currently charge around 10%, and as noted in recent weeks mortgages are at 5% or less.
Working on these interest rates the cost comparison of $10,000 owing on a credit card (at 20% interest rate) equates to $2000 in interest a year compared with the same $10,000 on your home loan (at 5%) costing only $500. The exact same amount owed on a credit card is four times as much as if it was owed on a home loan. Many credit card holders are beginning to be savvy with their outstanding balances and getting smarter about managing their credit card debt by making the most of the balance transfer cards offering 0% interest, typically for 12 months.
However, it might make more sense to absorb your credit card debt into your home loan while shopping around for a better mortgage option. With falling interest rates, right now is the best time to reduce your overall debt and simplify your finances into one easy and lower repayment. Rolling all your debt into one structure such as a home loan may allow you to focus on paying more off that one loan and reducing it faster if you choose. You will also reap the benefits from the variety of flexible structures now available improving cash flow that puts more money in your wallet!
How can your reduce all your debt right now?
It is our job to work for you to find you the best financing option for your situation and to support you in creating a better overall position. Right now we have access to a variety of lenders and lending options that can better serve you. We can give you the best advice and access to the best opportunities every day. If you are ready to access a better loan and rate for you contact us today on: 5482 2855. Or call our friendly residential team, Dannii and Jo on 07 5480 4859 or David direct on 0400224615 to book an appointment today and find out how we can save you more.