Five ways to manage higher interest rates

Higher interest rates have put extra pressure on household budgets this year, particularly for Australians with a mortgage.

The Reserve Bank of Australia has increased the cash rate multiple times in 2026 in response to elevated inflation, pushing up borrowing costs for many mortgage holders.

And with two monetary policy meetings still to come in November and December, the interest rate outlook remains uncertain. That means borrowers may want to prepare their finances for the possibility of rates moving higher.

Here are five steps that may help.

1. Review your home loan

Your existing lender may have changed its rates since you took out your mortgage, while competing lenders may have introduced more attractive offers. Comparing your current loan with alternatives can help you understand whether you're still getting a competitive deal. We can contact your existing lender on your behalf to see if they can lower your interest rate.

2. Consider refinancing

If another lender offers a lower interest rate or more suitable loan features, refinancing could reduce your repayments. However, switching loans can involve fees, so it's important to weigh the potential savings against the costs.

3. Use your offset account effectively

If your home loan has an offset account, keeping spare cash in it can reduce the amount of interest you're charged. For example, if you have a $500,000 mortgage and $20,000 in your offset account, you would generally pay interest on only $480,000. The same concept applies if you have a redraw facility and make extra repayments to your loan.

4. Make extra repayments if possible

Paying more than the minimum repayment can reduce your loan balance faster and lower the amount of interest you pay over time. Even relatively small additional repayments can make a difference over a long loan term. Make sure you check for any limitations for extra repayments for your loan in case there are caps or fees.

5. Review your household budget

Higher mortgage repayments can make it worthwhile to revisit your spending. Look for expenses you can reduce or remove, particularly recurring costs, and consider directing any savings towards your mortgage or offset account. If the interest is higher on your home loan than your savings account, it could be worthwhile putting more of your savings into an offset.

You can't control what happens to interest rates, but you can take steps to manage their impact. If higher repayments are putting pressure on your budget, we can review your home loan and see whether another option might suit you better.