Jeff's advice on interest rates

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By Dwain Duxson

Jeff's advice on interest rates - Interest rate talk is probably the hottest topic going around, and it directly affects Agriculture as we are talking some big numbers. As the equity in Farms has increased, the appetite for borrowing more money increases as Farmers look to expand their operations. More significant borrowings mean bigger interest bills.

So what interest rate should Farmers be paying right now? At our FarmTender2023 - Business of Farming event in March, Jeff McDonald from Riverland Lending Services spoke on this very subject and suggested to our audience that they should be getting rates of around mid 5's for an overdraft and low 5's for term debt (this was back on March the 3rd, 2023). What are you paying?

But Jeff said, don't get caught up on the lowest number. It's more to do with how you have your Farm debt hedged. He advises a mix of fixed and variable, which includes your Equipment Finance which is mostly fixed. He said, "If you get your loan structure correct, the rates nearly become irrelevant". 

Jeff and his team work closely with their clients to make sure they are in the best position possible with their loans. However, that's a bit of a rarity these days as banking has changed and finding someone to assess your situation is hard to find, especially at the big four Banks. That's why we should be reaching out to someone like Jeff for advice.