What is a Mortgage Cliff?
Mortgage Cliffs Explained
A mortgage cliff is when a borrower or mortgagee is heading to the end of a fixed interest lending period and moving into repaying their loan with a much higher variable interest rate.
When the difference in interest rate is significant, it can cause extreme stress as the base repayment jumps overnight.
Our OZloans mortgage broker team are specialists in helping borrowers to avoid the pain of a mortgage cliff. Solutions can include prevention measures such as borrowing less, or making repayments based on a much higher interest rate, eg, the current variable rate. Both of these options will reduce the difference betweeen the current repayment requirement and the new requirement under the upcoming variable rate.
Seek Expert and Independent Advice For Successful Property Ownership
Other strategies to reduce mortgage stress and proactively manage your success in staying ahead of the repayment curve can make a significant difference in getting the most out of every dollar you earn.
We always recommend to secure independent advice from an experienced mortgage broker before you sign on to any mortgage. Consider it as a cross-check before committing to what may be a complicated, inflexible and unsuitable financial commitment. It is also complimentary.