As one of the premier home renovation providers in the Perth area, we have a lot of experience in observing the effects of the economy on people who are interested in renovating their homes. Because we perform major home renovations such as home extensions and second storey additions, many of our projects involve refinancing of home loans to fund the renovations.
One of the patterns we have seen is people trying to “game” interest rates. They find an “expert” who says that interest rates are going to go even lower and try to wait until the “best possible time” to refinance. More often than not, they wait too long and refinance after the rate starts going back up, costing them thousands of dollars.
Paying Too Much Attention to Interest Rates can Cost You Money
Right now, the RBA interest rate is at an all time low. But did you know you would have saved money if you had financed a home renovation last September, when the rates were still the same? In October, the banks took it upon themselves to raise interest rates, citing the “tightening of regulations.”
Anyone who was ready to renovate in September but was waiting for the RBA to lower their rates even more cost themselves money and lost out on living in a better home for at least five months.
What Experts are Saying Now
“Experts” are divided about the future of the interest rate. Some see it steady all year; some see it rising; some see rate cuts in the future. In other words, people who work with interest rates for a living can’t even agree on what is going to happen.