Official interest rates have dropped again, and with most financial institutions (including Queenslanders) dropping their rates in step, the question is what will you be doing with the extra money this will likely give you?
For a lot of people this cut means they will be paying a little less on the mortgage and have a little extra cash at their disposal.
While this is a big relief for some people struggling with the rising cost of living and a high mortgage, it does leave a question around what to do with the money.
So what could you do with this “extra” money?
It is tempting to just spend this money, but before you do remember that this rate cut is a blessing that might not come again for some time, and this may be a great time to start a savings account or an emergency fund.
You could start, or simply top up, your savings. This is a great time to start a regular savings fund as you will probably not miss the money anyway. It may not seems like a lot, but even the smallest savings adds up over time.
Leave it on the Mortgage
This is a great strategy if you don’t want to use the money for anything else. This way you will be paying off the mortgage quicker and will be saving yourself thousands over the life of the loan.
Have you seen the rate for our Ultimate Home Loan yet?
Pay Off Debt
If you have some credit card or personal loan debt, this would be a fantastic way to pay it down while you have a chance. If you do this, just keep in mind not to rack it up again and think about cutting up your card.
There are many ways you could spend this money, but it is important to remember your long-term goals and not spend it on short-term comforts. Your future-self will thank you.