Aussies with a Commonwealth Bank, NAB or ANZ variable-rate home loan will see their interest rates rise today, as the Reserve Bank’s (RBA) latest 0.25 per cent hike kicks in.
Westpac customers will also need to prepare for a home loan hit, with rates set to rise on Tuesday, February 21.
The average Aussie with a $500,000 debt at the start of the rate hikes will now be paying $3,243 for their repayments – or $908 more than in May last year. That’s based on RateCity’s calculations for an owner-occupier with 25 years remaining.
While rates will go up today, RateCity noted that many customers would only see the extra money coming out of their bank accounts from April.
“Many households will need to start battening down the hatches, if they haven’t already, as the ninth RBA hike hits millions of mortgages from today,” RateCity research director Sally Tindall said.
“From food and petrol, to mortgage repayments, everything’s on the rise but with a bit of tenacity and some old-fashioned penny pinching, borrowers can start to hose down inflation in their own domain.”
Here are three ways to get ahead of rising rates and save almost $20,000.
1. Refinance – $13,319
If you haven’t renegotiated your home loan since the rate hikes started, RateCity said you were likely on a loan of about 6.11 per cent.
At least 10 lenders are expected to offer rates under 4.75 per cent once the latest hike comes through. That’s a potential difference of 1.36 per cent.
If you refinanced to this rate, RateCity found the average borrower with $500,000 owing could save a whopping $13,319 over the next two years, and more over the longer term.
2. Cut down your grocery bill – $5,720
Food is the next biggest expense for families, but a few tweaks to your shopping habits could save you thousands over time.
“Buying in bulk, shopping for specials at different supermarkets or even just switching to cheaper brands within your usual store can deliver surprising savings without too much additional effort,” Tindall said.
By swapping 23 items for cheaper alternatives, RateCity found a family of four could save around $110 on a weekly grocery shop.
3. Look for cheaper petrol – $908
Aussies spend about $97 filling up the car each week, according to the Australian Automobile Association.
“While no-one wants to drive across town, burning petrol in a quest for cheaper petrol, being mindful of when you fill up can go a long way if you tally the savings up over the course of a year,” Tindall said.
There is a $0.16 difference between the average and lowest-cost petrol stations across the capital cities, RateCity found, and a difference of up to $0.33 cents per litre.
A $0.16 per litre difference could save drivers $454 per year at the pump, while a $0.33 per litre discount would equate to a $908 saving per year.