Your house is likely both your greatest asset and your largest source of debt. So during the uncertain economic times caused by the global Covid-19 pandemic, it’s important to know how to plan and manage your finances. Take the time to work through your financial commitments while you have it to help ease any anxiety caused by this uncertainty. Here are our finance tips for the Covid-19 pandemic.
Set your financial goals
Top on the list of our finance tips for the Covid-19 pandemic is that your financial goals should be front and centre when managing your finances. It can help to seek the advice of your accountant, bank or a qualified mortgage broker when setting these goals to manage your mortgage repayments. There are a number of government initiatives available to those who have lost income as a result of the Coronavirus pandemic, and banks are also easing their lending restrictions, to help homeowners stay on top of their finances.
Do you have the best mortgage deal?
It’s worthwhile comparing your current mortgage deal to what’s now being offered by banks. The Reserve Bank has maintained low interest rates to help stimulate the economy during, and following, the Coronavirus pandemic. The banks have passed on these rate cuts in the form of lower variable and fixed rate home loans. Make sure you continue to shop around for the best deal that suits your circumstances. If you do have the lowest rate available, consider locking it in as this will give you medium to long-term certainty.
Can you extend or defer your mortgage?
If you have lost income due to the Coronavirus pandemic, it would also be worth investigating your options of extending your mortgage or deferring your repayments. While deferring your mortgage repayments can be helpful, it’s important to remember that you will have a larger bill to pay down the track. It can also help to lower the expenses you have at the moment if you extend your mortgage. Speak to your bank about the options available to you.
Scale back your expenses
If you’ve lost your income or you’re expecting to lose it as a result of the Coronavirus crisis, another finance tip for the Covid-19 pandemic is to protect your cash flow by scaling back some of your expenses. One example is cutting back from two cars to one if you can survive without it. Budget your expenses carefully so you can scale back spending where reasonable to do so.
Remember to speak to a financial professional before making big changes to your finances during the Covid-19 pandemic.