5 ways homeowners can beat the cost of living crisis
Homeowners have many cost cutting options, from getting a better deal on your mortgage and utilities to putting spare space to use.
The average Australian borrower is paying $12,061 a year more on their mortgage after multiple interest rate rises, according to Finder's Cost of living report.
Here are 5 ways homeowners can find savings and extra cash to beat the cost of living crisis.
1. Get a lower rate on your home loan
Interest rates have risen fast. Now almost every borrower is paying a lot more for their home loan than they were this time last year.
But borrowers can still make big savings with even a slightly lower rate. With a $500,000 home loan over 30 years, even a difference of 25 basis points works out much cheaper.
- Monthly repayments at 5.00% = $2,685
- Monthly repayments at 4.75% = $2,609
- Saving with a lower rate = $76 a month or $912 a year.
There are 2 ways you can get a better interest rate:
- Refinance to a new loan. Compare your options, find a lower rate, apply, and switch lenders.
- Call up your current lender and ask for a better rate. Sometimes your lender actually has a better deal for new borrowers. It's just not giving it to loyal old customers like you. Call your lender up and demand its best deal.
2. Get a better deal on your utilities
Energy bills are forecast to rise as much as 30% for many Australians this year. As with home loans, customers can't completely avoid rising energy bills. But many providers offer better deals than their default market offers.
If you've been with the same provider for over a year, check if you're getting the best deal. And make sure you compare plans from other providers.
3. Put empty space in your home to use
Various Australian companies let homeowners rent out parts of their homes in different ways to make a bit of extra money.
Parkhound lets you rent out a driveway or parking space. Spacer lets you rent out spare space in your home.
And of course platforms like Airbnb let you rent all or part of your home to guests. If you live in an area where travellers want to stay.
4. Put your savings to work
Rising interest rates hurt borrowers but the upside is you can generate more money through a term deposit or high interest savings account.
You can get rates close to or even above 5% now.
5. Review your budget and find new ways to save
One of the most effective ways anyone can combat rising living costs is to review their typical monthly spending. Work out where your money goes every month, identify expenses you can live without and find new ways to cut back.
If you need more tips and creative ways to save, sign up for Finder's weekly Dollar Saver Newsletter.
Check out Finder's 2023 Cost of living report to learn more about how inflation is impacting Australians. Get more helpful money tips to help you save.
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