Oops! They did it again. For the second time in as many months, the Reserve Bank of Australia has increased the official cash rate. As of June, we’re talkin’ a 0.50% increase to 0.85%. 

That means if you have a variable home loan, it’s likely your budget’s about to get a liiiittle tighter. 

Quick recap: if you have a $500,000 home loan, that means you need to squeeze an extra $133 out ya budget… and into your home loan. You can check out more about how your home loan will be impacted by the cash rate hike here.

With the RBA planning on increasing the cash rate to 2.5% over time, you might be getting a ‘lil worried your budget can’t stand the heat. Here are 3 ways to make sure it can!

STEP 1: The no-frills budget

It’s time to take a good, hard look at your budget. Where can you cut costs? Now, we don’t want you cutting everything out of your life… But it may be time to do some things smarter.

• Take stock of all your recurring subscriptions and aim to cut two of them (ie. do ya really need Netflix, Stan and Disney+?!)
• Switch a take-out meal (ahem Uber Eats) for one more meal at home
• No more café coffees! Five per week (at $5 a pop) = $100 a month. 

STEP 2: Negotiate with your providers

We all get slugged with the ‘loyalty tax’. That means, the longer you’ve been with your current provider, the higher your costs are likely going to be. So, maybe it’s time to negotiate a better deal with your providers… or make the switch. 

Make a list of your current providers and how much you pay. Think:

• Mobile phone plans
• Insurances (car and health)
• Energy plans (electricity and gas)
• Internet plans.

Start comparing, folks. Yup, it’s tedious… but doing competitor research and negotiating better deals with your current providers could save you hundreds per month.

‍STEP 3: Take stock of your home loan

Just because your lender raises interest rates, doesn’t mean you need to stick around to cop it!

Currently, the best variable home loan rates are through online lenders, with the leading rate at 1.99%. That’s around 1.24% lower than the average variable home loan rate out there.

Try and haggle with your current lender for a lower rate. It’s definitely doable - just make sure you check out the comparable rates out there and do your research before you make the call. The worst they can say is no! And if they do… it might time for an ‘ol switcheroonie. 

Now… It’s time to get ahead for next month!