Managing the rising cost of living

WITH DANIEL WALSH AND LEIGH DELEDIO FROM UFINANCIAL

Life is expensive. The cost of living has skyrocketed while wages seem pretty stagnant, or at least not rising nearly as fast as the cost of living.

According to a survey, 37 per cent of people in Australia reported cost of living pressure was the issue having the greatest negative impact on their mental health – more than any other issue. An estimated 2.44 million Australians suffer from financial stress. Ouch. From rising interest rates to your basic everyday groceries, $8 for raspberries – what is this! However, there’s a few strategies we can implement to manage the rising costs and maintain some financial stability.

Refinancing your home loan

One of the most effective ways to manage rising costs is by reviewing your current mortgage. Interest rates are a significant factor in your monthly repayments, and even a slight reduction can lead to substantial savings over time, potentially save thousands over the life of your loan. If you haven’t reviewed your mortgage in a while, now is an excellent time to do so.

It’s essential to compare various lenders and consider the associated costs, such as exit fees and application charges, to ensure refinancing is a financially sound decision.

To start the refinancing process, begin with a home loan health check. This involves consulting with a broker to assess whether your current loan meets your needs and identifying any missing features. Next, compare home loan products to find the one that best suits your situation.

Types of home loans

Understanding the types of home loans available can help you choose the best option for your financial situation.

Fixed-rate loans offer stability with consistent payments, making budgeting easier, especially in times of economic uncertainty.

Variable-rate loans, on the other hand, can provide flexibility and the potential for lower payments if interest rates drop.

Split loans, which combine fixed and variable rates, offer a balance between stability and flexibility, allowing you to tailor your mortgage to your needs. For those who want a balance of stability and flexibility, a split loan might be the ideal choice. This option allows you to fix part of your loan while keeping the rest variable, giving you the best of both worlds.

Choosing the right home loan is crucial to managing your finances effectively.

Need more help? Contact the UFinancial team today and let us help you take the first step towards financial stability.

For more information, head to ufinancial.com.au