Bank interest rates in Australia are currently at the lowest for more than half a century.
Added to this we have been grappling with the coronavirus pandemic which has brought a perfect storm with catastrophic job losses, not just in Australia but worldwide.
For many Australians, life is now on pause while we re-group with regard to our finances.
We have been thrust into a sink or swim position.
Now is certainly the time to ponder our financial futures.
A financial buffer
Our experience with COVID-19 has demonstrated very clearly that as homeowners we require a financial buffer in place so that in challenging economic times we can continue to meet our mortgage commitments as well as basic living expenses for a period of time until our finances stabilise.
When setting up a loan repayment plan, it is prudent to have as part of our capacity or strategy, the ability to accommodate or shoulder adverse income impacts such as illness or job loss.
With a financial buffer in place, in challenging times we will be able to continue with a level of stability to which we are accustomed and which will enable us to stay in a stronger place overall until such times that we land on our feet again.
Tim McKibbin is CEO of Real Estate Institute of NSW. For more information visit www.reinsw.com.au