What will interest rates do next?

Here is what owner of Finance Corp Tracey Mentesana had to say in her latest blog –

The current economic climate has been cause of concern for home owners, investors and those looking to get in to the home market. The big question is “What should I do?”

Interest rates have been holding steady which has been a good thing for all. But will they stay this way? Well, it is unlikely that we will see rates fall below 6%. The extremely low rates we saw in recent years were unsustainable and it is unlikely that we will see them so low any time soon. Currently, fixed rates are the lowest we have seen in months.

However, taking a long term view interest rates are still relatively low.  And whilst current predictions would be that rates will be kept on hold for the remainder of the year, it is likely that 2012 will see them trending upwards again. One of the main reasons we will see interest rates move upwards is the pressure that rising inflation has on them. Inflation is currently running at a two year high and this will inevitably affect interest rates over the coming months.

So what does this mean to you? If you are already in the market you should have a chat to FinanceCorp about fixing some or all of your mortgage and consider if this is right for you. If you are looking to buy in to the market have a chat with us about what you can afford now and in to the future.  Remember all advice needs to be appropriate to your individual needs so keep this in mind. At FinanceCorp we can help you work out what you can afford (affordability and serviceability)

Next month we will look at the housing market and what the future holds for the volatile Perth market.