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Interest rates have gone up. So what can you do?

by Larissa Andrews
02/08/2022 in Guides

Interest rates have gone up. So what can you do?

Interest rates have gone up. So what can you do?

Following the announcement that the Reserve Bank of Australia (RBA) has lifted interest rates for the fourth time this year, many Australians are grappling with the prospect of increased repayments for the foreseeable future. 

Rate rises are projected to be the norm at least until the tail end of the year, if not longer. As the majority of lenders choose to pass on interest rate increases, repayments could increase by thousands every year. 

Data from Core Logic shows that under an average variable rate, median mortgage repayments would increase by $118 per month with an increase of 25 basis points. However, monthly mortgage repayments could increase to $323 with a 100 basis point lift and soar to $668 under a 200 basis point lift.

If you currently have a mortgage or are planning to borrow in the near future, this news is probably incredibly stressful. But don’t worry — there are things you can do to minimise the impact of current and future interest rate hikes. Here are some of our top tips to navigate the rate increase and keep your finances (and your sanity) intact. 

Check your current loan

Haven’t been keeping close tabs on your current home loan? If so, it’s time to put your mortgage under the magnifying glass to see if it still stacks up. Your interest rates may have shifted since you first took out the mortgage, or you may want to switch to another home loan with extra features, such as an offset account.

Contact your broker as soon as possible to see if refinancing your mortgage is a viable option. They’ll be able to provide free advice that’s tailored to your personal and financial situation, as well as access exclusive rates that may not be available to the general public.

Review your budget

Increased interest rates bring increased repayments, which is why you need to have a little extra wiggle room in your budget for your home loan in the future.

Take a look at your current spending habits to see if there is room for improvement. This could be the time to reduce the number of streaming services you subscribe to, or to cut back on eating out to just once a week or fortnight.

Don’t forget about your regular bills either: check your electricity, insurance, internet and phone provider to see if you’re getting the most bang for your buck.

Finally, start putting away some extra money into your emergency funds. This safety net will come in handy for any unforeseen circumstances in the future, particularly if your repayments keep increasing.

Repay any outstanding debts

Alongside revisiting your budget, now’s the time to get on top of any debts that are currently outstanding.

While your home loan is likely to be the most significantly affected by rate rises, other credit products aren’t immune to the decisions of the RBA.

Repay any outstanding bills, car loans, personal loans, or credit card loans. At the same time, try to minimise your use of Buy Now, Pay Later (BNPL) programs, as these can add even more of a burden on your finances. 

Struggling to keep track of your debts? It’s worth looking into debt consolidation, where you bundle all of your debts into one monthly repayment.

Make extra repayments if you can

When you have less owing on your home loan, you’ll be charged less interest. This is because the amount of interest you pay is directly correlated to the amount that’s outstanding on your mortgage.

Want to see how much you could save? Try our comparison rate calculator today.


Before you make extra repayments, make sure to check the terms of your loan. Variable home loans typically allow you to make unlimited extra repayments, whereas fixed-rate loans may charge a break fee for additional repayments.

Look into fixing your interest rate

Interest rates are projected to rise for the remainder of 2022 and potentially into 2023. These fluctuations can bring about uncertainty in terms of repayments, which can cause undue stress and financial challenges. As such, it’s worth exploring fixed-rate loans, especially if you’ve been on a variable loan until this point.

With a fixed-rate loan, you’ll be able to lock in an interest rate for a set duration of time,  typically ranging from one to five years. This protects you from market fluctuations and rate rises and provides peace of mind when budgeting for the future.


If you’re concerned about rising interest rates, speak to a broker today to explore your options. The Rateseeker team are here to help you navigate the uncertainties of the market and find the best home loan for your personal and financial situation — and best of all, it’s absolutely free. Contact us today to get started.

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** General Advice Warning

The information provided on this website is general in nature only and it does not take into account your personal needs or circumstances into consideration. Before acting on any advice, you should consider whether the information is appropriate to your needs and where appropriate, seek professional advice in relation to legal, financial, taxation, mortgage or other advice.

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Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn’t take into account any product features or any applicable fees.

*3.01% Interest rate based on an Owner-Occupied, Principal and Interest, standard variable, minimum loan size of $250,000, maximum LVR of 80%, over a 25-year term. Eligibility is subject to servicing requirements, contact one of our specialised mortgage brokers for more information.

^3.02% Comparison rate based on a loan of $250,000 over a 25-year term. WARNING: The comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Costs such as redraw fees or early repayment fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan.

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