interest rates & renovation budgets?

What do lower interest rates mean for renovation budgets?

Article By: Tim Hurley | November 2015

What do lower interest rates mean for renovation budgets?

With some banks negotiating as low as 4.25% a valid question is “what does this mean for my renovation budget?”

The short answer is: “It depends on your long term plan and your unique financial situation.”

Interest rates are very low now by historical standards. So it may be beneficial to perform more comprehensive renovations if both:

1. Your renovations are adding value and

2. You plan to sell your property in the next 2-3 years.

But the 2 year interest rate has actually averaged 7.1% since the year 2000. So if you’re planning to keep your house long-term you need to ensure you can cope with possible interest rate rises.

It’s also very important to weigh up the certainty of long term fixed rates with the flexibility of floating and shorter fixed terms. Many people are faced with large break fees if they want to lock in the low rates currently on offer.

Tim Hurley has held a number of senior banking roles and now performs a comprehensive mortgage broking service.

Tim has a unique understanding of both how banks operate inside and out, and how financial markets impact your mortgage rates. This enables him to add real value to his clients. Tim’s services are free if your mortgage is over $200,000.

Please note, this article is broad in nature so does not constitute personal financial advice.


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