Five Tips For Dealing With Rising Interest Rates

It’s no secret that continually rising interest rates have made a significant impact to the lives of Australians. And when combined with increasing costs of living, it’s not surprising that financial stress and concerns for the future have intensified.

Here are five tips to help manage your money in these expensive times.

1. Revaluate your budget If it’s been a while since you’ve revisited your budget, now is a great time to do so. Check for areas where you may be overspending, particularly for entertainment subscriptions or gym memberships that we can all be guilty of not fully utilising. You may also wish to look into other utility providers for your electricity, insurance and phone to get a better deal.

2. Refinance Refinancing to a fixed-rate loan can protect you from future rate hikes, and may even lower your monthly repayments. However, there may be costs and fees associated with this, so they need to be considered before deciding if making the move is right for you.

3. Shop around Shopping around for a lower rate could make a huge difference to your monthly loan payments. If you’re not sure where to start, a mortgage broker has the expertise to find the best deal possible, so engaging with one may be very worth your while.

4. Extra repayments Committing to make extra repayments, where possible, is a great way to pay off your mortgage sooner. One tactic you could use, is to keep paying the higher rate towards your mortgage, even if you do negotiate a better rate. Or, if you receive an unexpected sum of money, be it from a tax return or work bonus, you can put it straight towards your mortgage.

5. Pay off any high-interest debt If you have any high-interest debt, eliminating it as quickly as possible can help you free up cash flow for other priorities. This could be for a credit card you’ve been meaning to pay off or other loans the come with high interest rates.

Coping with increasing interest rates and costs of living requires some careful planning and consideration. If you’re feeling overwhelmed, getting in touch with us to discuss your strategy, may put your mind at ease.