Newcastle Living Magazine
Six tips to save money as cash rates rise
It’s safe to say Australians are feeling the pinch as interest rates rise across the board – not just here in Newcastle, but the country as a whole. Whether paying off a mortgage or saving to purchase property, the cost to service a loan is increasing. This, combined with high inflation, growing cost of living, and relatively stagnant wage growth has made it crucial to double down on saving money where possible.
But there’s no need to completely stress. In fact, there are always steps you can take to lessen the strain on your back pocket. While you might not be able to avoid increasing interest rates, if you’re on a variable interest rate or an expiring fixed rate loan, there are a number of ways you could still save money. Keeping this in mind, the team at Loan Market have put together a list to help you navigate ways you could potentially save money while the interest rates continue to rise:
1 / Refinance your loan
While it might seem like an obvious first tip, it’s one of the easiest ways to lessen financial burden. Get your broker to check if you can reprice or refinance your loan to a lower rate or for lower fees. The process is relatively easy and can make a world of difference.
2 / Consider your package
Your broker can also check if your home loan package suits your needs. For instance, you could possibly switch to something more basic if you are not using all the features, which could save you in fees. Or if you would make use of additional features that could save you money, such as an offset account, your broker can run the calculations for you to determine if it is worth switching.
3 / Change the term
You could consider extending the term of your loan to lower repayments. While this means you’ll be paying more over the life of the loan, it’s a good option if you are experiencing cash flow problems now.
4 / Check your budget
By making note of all your expenses, you can identify areas where spending could be reduced. This could include memberships, subscriptions or luxury purchases.
5 / Offset account/redraw facility
If you have an offset or redraw facility, now is a very good time to make use of them. By putting money into your offset or additional repayments on your loan, you will save on interest which becomes even more money as interest rates rise.
6 / Extra repayments
If your loan allows for it, consider making extra repayments now, which can save you money in the long run as interest rates continue to rise.