Okay, we get it, interest rates are going up: what can you do about it?

WITH LEIGH DELEDIO FROM UFINANCIAL

There’s been a lot of talk about interest rates increasing. I should know; I have written about it a few times.

While it’s great that there are plenty of communication channels talking about rate increases to keep everybody updated, I couldn’t help but notice that all this talk around rate increases was doing more harm than good.

Don’t get me wrong, it’s important to keep yourself updated with the latest news, especially when it affects your mortgage repayments.

However, a lot of the news around interest rates can be alarmist.

Okay, we get it. Interest rates are rising. Is there anything you can do about it?

As a matter of fact, there is.

Not long after the first rate hike was announced, Commonwealth Bank published some research about Australian homeowners who were already taking steps to mitigate the impact of rising mortgage rates (good on you, mates!).

According to the research, more than 90 per cent of the respondents had taken steps to lessen the impact of rate hikes:

Nearly half (47 per cent) reviewed and reduced their living expenses

42 per cent started building up their savings

Three out of four people started making additional repayments on their home loan

37 per cent started putting money into their offset/redraw account, and

33 per cent started looking for cheaper providers for utilities/services.

If you don’t know where to start in response to interest rates going up, the very first item on your list is to audit your finances.

That will help you identify where you’re spending your hard-earned money and give you an idea of what could be improved.

The second item on your to-do list is to review your loan to make sure your current loan is still the right one for you.