Can you tell me who increases or decreases interest rates?

Interest rates are based on decisions made by the Reserve Bank of Australia (RBA) on behalf of the Federal Government. The RBA meets on a monthly basis to consider whether interest rates should increase, decrease or remain the same. Lenders then use these decisions as a basis for setting the interest rates for their individual loan products and will usually alter interest rates a day or two after any RBA announcement.

As a 'rule of thumb' when the economy is in a trough (ie. unemployment is high and consumer spending is low) the RBA reduces interest rates to stimulate economic activity. The reverse is the case in a 'boom' situation and rates are increased to curb inflation.

                

What are the risks in switching loans? I'm not sure if I'd be better off sticking with the loan I have or changing?

Making the decision to refinance is a difficult one as there are hundreds of loans available from hundreds of lenders. On top of that, there are a number of other factors to consider such as how long do you want your loan period to be? or how much you can afford each month? Sometimes re-financing is not the answer so contact your lender or speak to a Mortgage Consultant.

                

I would love to own my own home but have a default listed on my credit record from a previous loan. The default has now been paid. Do you know how I can make sure this is reflected on my record?

A default listing will remain on your file for a period of five years. So whilst you can't change history, the best approach would be to ensure the rest of your credit history is 'spotless'. If you would like a copy of your credit record, you can contact a credit reporting agency to ensure your default is listed as paid. Baycorp Advantage is Australia's largest credit reporting agency and can be contacted via www.mycreditfile.com.au or phone (02) 9464 6000.