Preparing for rising interest rates

Work out what different increases mean for you, such as:

"If interest rates increase by 0.25% p.a. or 0.50% p.a. or even 1.00% p.a., this increases my repayments by this amount per week/fortnight/month."

Use our repayments and structuring calculator to play around with higher interest rates. Our current rates display in the calculator. Select a 'custom' rate and make it higher to see what the outcome is.

While some of your expenses are fixed, like rates, others can be challenged.

Are you getting the best deal on power and internet or could you switch providers and save? If you had to cut back your current spending, what would you give up to give you some breathing room?

See our full guide on how to create a budget.

Review your current structure and whether it suits your needs at this point in time.

• Fixed term loans — when do these come to an end, and do you want to re-fix them as they are? Or would you benefit from splitting your home loan up and using different loan types?
• Variable loans — are you benefiting from the flexibility? If you aren't, would you be better off locking in a fixed term rate before they rise much further?

You could also consider an offset loan to use the money you have in linked accounts to reduce the amount of interest you pay on your offset loan.

Making a lump sum payment reduces the total of your loan, which reduces what you're paying interest on.

Ask yourself:

• Does your loan type allow you to make a lump sum payment?
• Do you have room in your budget to make a lump sum payment?

If you're planning to make a lump sum payment soon, doing it sooner rather than later means you're lowering the amount you're paying interest on.

When uncertainty is in the air, focusing on what you can control can help you feel more confident, such as:

• Contributing to your emergency fund
• Saving for your goals, even if you have to reduce the amount
• Making sure you've set up your accounts for success.