Huge interest rate rises have turned up the heat on household budgets. With many financial analysts predicting more increases, now is the time to make adjustments to your spending.  

There are a number of ways you can cut back spending and have a little more in savings, but the major expenses such as personal and home loans is where big savings can be made. Australians who refinanced to a different lender were able to get an estimated annual saving of just below $2,000, significantly higher to the $384 annual savings of those who refinanced with their existing lender.  Read more about this here. 

Big savings are made on interest rates, not cutting out coffee! Take a look at the tips we have complied to ease your burden.  

What does it mean to refinance? In the context of loans, the objective of refinancing can be a mix of lower interest rates and fees, easier repayment terms, or better loan features. Essentially you are entering into a new mortgage obligation, replacing the original.  

Consider your position in the market and how you can compete for competitive rates. Take your interest rate and compare it to the lowest on the market, you may not achieve the lowest rate but you can use it as a benchmark. Throughout the process of comparison, consider the savings amount per pay check to contextualise the difference it will make.  

Interested in switching? Check out our mortgage switching calculator this calculator helps you estimate whether you would save money and pay off your home loan earlier by switching to another mortgage.  

Be flexible. You may find the best savings are made by switching banks. The best deals to be made are as a new client, banks incentivise joining with a slew of offers and deals that puts money in your pocket! 

Financial experts are predicting further rate rises in 2023, you may be thinking about waiting until that happens to refinance but beware of ‘mortgage prison’! 

‘Mortgage prison’ sounds like something straight out of Monopoly but it is very real. Due to the sharp increase in interest rates, as loanees attempt to refinance loans that were on fixed low rates, they may no longer pass bank’s assessments for loans. Make sure you don’t get stuck by looking around now while options are not as limited.  

Keep an eye on insurance policies. Just like interest rates, insurance premiums have soared over recent months. It is important you don’t reduce your premium at the detriment of your insurance cover however, you should check you are only paying for extras you need. 

Review your spending, there are a number of great mobile apps that can take the guesswork out of budgeting. Keeping a close eye on expenditures will help you decide non negotiables, negotiables and unnecessary goods and services you consume.  

See all the relevant stats below.

Printable version here: 2023 Australian Living Crisis Explained with Statistics

Refinancing appears daunting, but don’t let it intimidate you at the detriment of your savings. Speak to our knowledgeable, friendly team on 1300 815 921 or info@greenassociates.com.au  

At Green Associates, all of our advisers are fully licensed and listed on the ASIC Moneysmart Financial Adviser Register. Green Associates is committed to providing the best solutions for you and your wealth-creation journey.