Learn How To Beat Your Next Mortgage Interest Rate Rise - Calculate Your Impact Today Before it Hits Your Budget

When the RBA announces another interest rate rise, for Australian mortgage holders it means one thing: your mortgage repayments are going up.

None of us want an interest rate rise, but now that it's here, the next best thing is being prepared before it hits your mortgage.

Unfortunately when the RBA announces a rate rise, most Australian homeowners wait to see what their bank will charge them.

But the difference between financial stress and financial control is as simple as knowing YOUR mortgage repayment increase and the impact it will have on YOUR budget, before the first repayment hits your account.

Calculate your impact right now - and then start reviewing your budget, your income and your spending before it hits.

Don't wait for the bank to pass it on and increase your repayments, by then it's too late.

Let's go through these easy steps you can follow to beat your interest rate rise.

As a quick summary, here's what a rate increase looks like on a 30-year mortgage (approximate monthly increases):

While the above estimates are a good start, what's important is to know how much your actual repayments will go up with a 0.25% or 0.50% rate rise, so you can start to plan for it.

Unfortunately most Australian homeowners don't know their number, and when the next rate rise is announced, and the bank increases your repayments, it's too late. You're reacting in panic mode instead of planning ahead.

Don't wait until the next rate rise is announced.

It's really important to know how much your repayments will go up by, as this is the actual amount of money you will need to find each month.

Your actual increase will be different based on your current balance, loan term remaining, current interest rate, and any offset or redraw balance you may have. That's why you need to calculate YOUR specific situation.

You can calculate your number manually using an online mortgage calculator, or if you are using the MoneyFormula to manage your mortgage, your number is one click away.

From the Mortgage Tracker, open the interest "Rate Change Report", click on + 0.25% and get an instant comparison between your current repayments and your new repayments.

TIP - If your mortgage changes by other amounts than 0.25%, you can simply enter the new rate that will apply to you.

The interest rate rise report will instantly show you a summary of the impact in both a chart and spells out exactly what is going to happen, so you know exactly where you stand.

In the example above we can see that the report is telling us:

So we now know we need an extra $83.73 a month to cover the impact of the rate rise.

If you want a full breakdown of the impact drop down to the rate comparison table that gives you a complete comparison between the current and new repayment amounts.

We can see from the above you now have the full details on the impact on your repayments no matter how you are paying them (monthly, fortnightly, weekly), the total interest impact and so on.

If you have an offset account (or redraw amount), try to build it up before the rate rise comes through.

Every dollar you put into the offset reduces the mortgage balance before the bank calculates your interest.

You can easily add your current offset account balance into the interest rate rise report above at a click of the button, or set the value to any future lump sum or offset amount you want to test, and see how much it will save you.