When interest rates are rising, household budgets can be left in tatters. But don’t toss out the budget just yet!  Simple strategies can help you navigate higher rates – and keep your finances in tip top shape.

Get to know the numbers

To kick things off, let’s work out how much your home loan repayments could change if rates rise. No one can say for sure how rates will move, but it pays to be prepared, right?
Our nifty table below shows how much extra you may need to fork out each month on a variable rate loan across a range of possible rate rises.
If your home loan is worth say, $500,000, a 0.1% rate rise could see your monthly repayments increase by $27. If rates jump 0.25% you may need to find an extra $68 each month. Further along the scale, a 0.5% rate increase could add an extra $136 to monthly repayments.
 

Possible rise in monthly repayments* - various rate rises
Value of your home loan	If rates rise by 0.10%	If rates rise 0.25%	If rates rise 0.5%
$400,000	$22	$54	$109
$500,000	$27	$68	$136
$600,000	$32	$81	$163
Source: ME’s Compare our Home Loans Calculator[1] *Based on remaining loan term of 25 years, with principal and interest payments

 
To find out how your loan repayments could change if rates rise, head to our loan repayment calculator. It lets you play around with the numbers so you can plan ahead.

7 steps to beat rising rates

What options do you have to beat rising rates? Plenty!
We’ve pulled together 7 strategies that can put cash back in your pocket, helping you manage rising rates – and potentially leave you in better financial shape.

1. Become a budget-boss

If you’re not already budgeting, there’s no better time than now to make a start.
A budget helps you track spending, shows where you can cutback, and lets you monitor regular savings. What’s not to love?
Try a budgeting app like Frollo, MoneyBrilliant or Pocketbook, and have your budget in your pocket wherever you go.
Or head to our Budget Planner and we’ll crunch the numbers for you.
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2. Spark up savings on power

Interest rates aren’t the only thing rising. Power prices are heating up too[2] – time to check if you could get a better deal.If you’ve been with the same provider or plan for a few years, there’s a good chance you could save by switching.
To know for sure, dust off your latest power bill and head to Energy Made Easy. Plug in a few details about your current provider and household power use, and the site shows how much you could pay with other providers.
Sydneysider Michael T did just that and discovered big savings. “It turns out we’re on a really old – and expensive plan,” he says. “I was amazed at how much I can save – easily $800 a year, just by moving to another electricity provider.”

3. Rethink grocery shopping

Groceries can take a big bite out of household budgets. If that sounds like you, switching supermarkets can mean big savings. According to Aldi’s 2022 Price Report[3], making the move to Aldi could cut your annual grocery bill by up to $2,468.
Or head to produce markets or your nearest farmers market for super-fresh greens at budget-friendly prices. Ayushma R and her partner ditched the supermarket shuffle in favour of stocking up at Flemington Markets in Sydney.
“It’s a really fun day out,” Ayushma says. “Lots of atmosphere, plenty of free samples, and the fruit and veggies are so much cheaper than in the big stores. We’ve cut at least $50 off our fortnightly grocery bill.”

4. Skip the auto-renew

When insurance renewals roll around it can be tempting to tick and flick, paying the bill without checking if you could save elsewhere. It’s quick and easy but it could be costing you.
Shopping around is the only way to know if you’re getting value, and most insurers give new customers a discount of 10-15% when you organise and pay for cover online.
Don’t just look at the savings. Be sure the cover offers the right protection for your needs.

5. Unleash your inner chef

Rising interest rates spurred Chris F to go easy on home delivery food apps – and try his hand at cooking new cuisines.
Chris says, “I’d fallen into the habit of ordering a lot of home delivered meals, and the cost was really starting to add up.
“I signed up for emails showing the latest supermarket specials, so I compare prices, buy whatever’s discounted, and then check out free recipes online to try something new.
“My homemade butter chicken has become a crowd favourite, and spiced lime chicken tacos are pretty popular too. I’m easily saving $80 a week.

6. Scratch unwanted subs

From gym subscriptions to streaming, it’s a fair bet you’re paying for services you’re not getting maximum value from.
Research by Finder[4] for instance, shows gym membership can cost an average of $19.70 per week. Yet almost one in ten gym members only head to the gym once a year or not at all. Five percent visit the gym once every six months, spending the equivalent of $512 per session.

7. Start now!

Rising interest rates mean it’s game-on to get on top of money matters. Plan ahead and let the savings stack up with a few smart steps. It can help you come out on top even when rates are climbing higher.