How to survive the rate rise squeeze
Written and accurate as at: Oct 29, 2026 Current Stats & Facts
The RBA has lifted rates several times this year. For households already dealing with high grocery bills and petrol prices, higher mortgage repayments certainly won’t be welcome news. But there are some practical ways to ease the pressure.
Stress test higher payments
Your lender will let you know when your repayments are changing and by how much, but you don't have to wait for that letter to see what might be coming.
Using an online mortgage repayments calculator, try modelling a few different interest rate scenarios to see how much more you could be paying and whether there’s enough room in your budget to cushion the blow.
You might be on stronger footing than you think. After all, when lenders assess home loan applications, they often test whether borrowers can manage repayments at higher rates. If they didn’t think you could handle it, chances are they wouldn’t have approved your loan in the first place.
Use your home loan features
If you have an offset account linked to your home loan, it can be one of the most useful tools in your arsenal, especially when rates are rising. By parking your savings here, you can reduce the balance on which interest is calculated, potentially saving you money over time. It can also do double duty by functioning as an emergency fund, keeping money accessible for unexpected expenses.
Cut back on non-essentials
Outside your mortgage, are there other expenses you could trim? Shopping for cheaper utility plans or cancelling subscriptions you rarely use can free up money to put towards higher repayments. For groceries, buying generic brands, sticking to a list of planned meals, and comparing prices between stores can also help bring costs down.
Review your mortgage
If you believe the lender you signed up with is no longer competitive, it might be worth researching other offers on the market. You might be able to save money by refinancing to another lender, or use a competing offer as leverage to secure a better deal.
Even a small reduction could make a difference to your repayments over time. Just make sure to focus on the comparison rate, which factors in the interest rate and most fees and charges. And keep in mind that refinancing can come with fees, and a loan with a lower rate might come with conditions or fewer features.
What to do if you are already struggling
If you're already finding your mortgage repayments difficult to manage and you're worried that you’ll buckle if rates go up further, contact your lender to discuss your options.
Their financial hardship team may be able to work with you to draw up a plan. Depending on your circumstances, this could include temporarily reducing repayments, taking a short repayment pause or switching to interest-only repayments for a period.
These arrangements can provide some breathing room while you work to build up other buffers, although some may increase the total interest you pay or leave you with more to repay down the track. Make sure to ask your lender to explain the longer-term implications before agreeing to a change.
Remember, there’s no shame in asking for help when you need it. In fact, it’s often the smartest thing you can do. And it’s better to ask for help sooner rather than later, before you reach a crisis point and your options become more limited.