Barefoot Investor issues a warning to Australian homeowners because interest rates are falling to the lowest level

Barefoot Investor gives a hair-raising warning to Australian homeowners to reduce their debt NOW or a & # 39; one in a lifetime opportunity & # 39; to be missed if interest rates fall to record levels

  • Australians are warned to pay off their debts, even though interest rates are low
  • Scott Pape, better known as Barefoot Investor, gave the warning this week
  • He warned that interest rates would eventually rise again, so that borrowers now have to release debts
  • The Reserve Bank lowered the cash rate earlier this month to a low of 1.25 percent

Australian homeowners have received a hair-raising warning because interest rates are falling to a low point.

Scott Pape, better known as Barefoot Investor, says that Australian households are in a unique position to pay off their debts before interest rates rise again – but the opportunity remains.

& # 39; For the average homeowner, this is a chance to pay back debts, and unfortunately not many people take my warning into account, "he said. news.com.au.

The financial guru is concerned that many Australians have incurred a huge debt through home loans, credit cards and loan apps.

Scott Pape, better known as Barefoot Investor, says Australian households are in a unique position to pay off their debts before interest rates rise again

Scott Pape, better known as Barefoot Investor, says Australian households are in a unique position to pay off their debts before interest rates rise again

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The cash rate was reduced to 1.25 percent in June by the Reserve Bank of Australia.

The last interest rate reduction was 1.50 percent in August 2016.

The current percentage is low.

Lenders use the cash rate as a guideline in determining their interest rates.

There is no obligation to pass on the interest rate cut, but they do a lot because of the competitive credit market.

Low rates are good for mortgages and other credit.

However, they also mean that savings accounts and term deposits receive less interest.

He urges borrowers to repay debts instead of being seduced by low interest rates to get even further into debt.

& # 39; We have a record high debt when the interest rate is low, so what happens if and when interest rates start to rise, that's what I'm worried about. I think it's a recipe for disaster. & # 39;

The cash rate was reduced to 1.25 percent earlier this month, the lowest at record level.

Many lenders have passed on the interest rate cut in their mortgage loans with variable interest rates in the low range of 3 percent and fixed rates of interest, even in the range of 2 percent.

While this is good news for those who are actively clearing their debts, it can also tempt some people to borrow more.

He warned borrowers that sooner or later interest rates would rise again and it would become too dangerous to incur too much debt.

He warned borrowers that sooner or later interest rates would rise again and it would become too dangerous to incur too much debt

He warned borrowers that sooner or later interest rates would rise again and it would become too dangerous to incur too much debt

He warned borrowers that sooner or later interest rates would rise again and it would become too dangerous to incur too much debt

For those who save – or live on savings like pensioners – the interest rate cuts mean less interest on savings accounts and term deposit accounts.

Pape also launched a plan this week to make the next generation more aware of money by giving financial lessons at schools.

He is rolling out his Money Movement program to thousands of schools throughout the country. Since its launch in May, more than 2000 have registered.

The grassroots information campaign aims to improve students' ability to manage money by teaching them to make budgets and to negotiate deals.

The program is filmed for a documentary series for Foxtel.

Pape recently announced that he would close his business – a subscription by e-mail newsletter with financial advice – to focus on non-profit financial advice.

His latest book, The Barefoot Investor for Families, has sold more than 200,000 copies.

Pape (pictured with partner) also launched a plan this week to make the next generation more aware of money by giving financial lessons at schools

Pape (pictured with partner) also launched a plan this week to make the next generation more aware of money by giving financial lessons at schools

Pape (pictured with partner) also launched a plan this week to make the next generation more aware of money by giving financial lessons at schools

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