NOW is the time to be making extra payments on your home loan.
That's the message from Financial Planning Association of Australia Mackay chapter chairman Matthew Stevens.
People should be taking advantage of the historically low interest rates to get themselves out of debt faster, Mr Stevens said.
"Now is a great time to be consolidating your debt by paying off as much as you can," he said.
"Lows may not last forever.
"Don't take comfort in the fact that interest rates are at a lesser amount."
When it comes to choosing a fixed interest rate or a variable rate home loan rate, Mr Stevens said it depended on your cash flow needs.
"If their own cash flow demands they need a certain amount of cash they should look at a fixed rate," he said.
"Variable rates allow you to pay off more.
"But if you're worried a high rate of interest would affect your personal position, a portion of your home loan should be on a fixed rate."
While loans come in all shapes and sizes - from capped, short-term fixed or discounted variable rates to plain variable rates and longer-term fixed rate loans - many borrowers don't consider what could happen if they choose to exit their loan.
Mr Stevens said borrowers were less likely to switch home loans due to exit fees.
"There are still fees associated with changing and they can often offset the advantages you're looking for," he said.
And although interest rates continue to remain low, Mr Stevens warns people to prepare for a rate rise.
"It's always best to prepare for an increase in rates at some point. To remain at these lows long-term could very well be a false assumption.
"You shouldn't take comfort that interest rates are simply lower and freely spend more. Use this period of time to reduce your debt."
LOOKING FOR THE BEST PRICE
NATIONAL Australia Bank store manager Younes Chopra said customers were always looking for the best price on their home loan.
"They're always looking for a better interest rate," Mr Chopra said.
"Different people are looking for different things at the moment.
"People are fixing their home loans at the moment to get that stability with their finances, especially when there are a fixed rates like 4.99%. People should consider the whole home loan package, and not just the interest rates, and consider their requirements and look for features that suit their needs."
Currently the standard variable rate at NAB is 6.38%, the package rate is 5.53% for loans between $250,000 and $500,000 and 5.38% for loans of more than $500,000.
Mr Chopra also recommends that borrowers shop around.
"NAB has cut their fixed interest rate across a range of terms," he said.
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