Take the high road

Interest rates might have gone against borrowers this week, but there are plenty of actions that could help countermand the impact. We take a look at some changes you might make both to your home loan and daily life, that might tip the balance back in your favour.

One handy option is to review the debts you are currently carrying, with a view to consolidation. By combining high-interest debts such as personal loans or credit cards into the home loan, borrowers can reduce monthly payments and improve financial health.

Is loyalty costing you money? Many homeowners are unknowingly overpaying on their mortgage, simply because of a ‘set and forget’ approach. Talk to your broker about potential savings available through refinancing.

One option for finding short-term relief is to extend the term of the loan. Understanding the long-term implications of your loan gives you options - adding an extra five years to the term could save thousands in repayments in a year - but it also needs to be approached with caution, as the extension could be costly over the longer term.

Possibly the best way to reduce immediate mortgage stress is by finding savings opportunities. Identifying and changing lifestyle habits can potentially save dollars a daily basis. Here are some things you and the family can do around the house that cost nothing but save cash.

•. Review subscriptions and cancel if unused or non-essential;
•. Look into switching insurance and energy providers;
•. Take lunch to work;
•. Turn off lights when you leave a room;
•. Run the dishwasher only when it is full – or wash up by hand;
•. Use cold water for laundry and wash only full loads;
•. Use the sun and wind to dry laundry;
•. Close curtains and windows at sunset during winter and set the air conditioner to 20°C, year-round;
•. Reduce the temperature setting on the hot water cylinder, to around 60°C;
• Switch off TVs, DVD players, computer monitors, stereos at the wall when not in use and if you have a beer fridge, turn it off through winter. Appliances on standby waste energy.