Nifty tips to keep your cool and manage mortgage stress

Bloody interest rates are on the rise, mate, making it tougher for Aussie families to handle their finances. Don't sweat it though! We've got your back with some top-notch tips to help you wrangle that mortgage like a pro.

What the bloody hell is mortgage stress?

Are you feeling the pinch? It's when your mortgage payments gobble up more than 30% of your pre-tax income, leaving you to scrounge for cash like a seagull at the beach. And with food prices skyrocketing faster than a SpaceX rocket, plenty of Aussie families are feeling the squeeze.

Inflation in Australia has hit its peak and it's staying high. The March quarter saw a decline in headline inflation to 7%, but trimmed mean inflation still sat at 6.6%. Goods prices dropped a little later than in other countries, but the pressure was offset by high costs and even higher demand for services. Oh, and don't forget the rent—it's been creeping up steadily thanks to a tight market. Speaking of prices, Coles and Woolworths have been hiking up their grocery prices at an annualised 9.6% increase in April, leaving a ton of Aussies struggling to keep up with mortgage payments.

Check out these tips to manage your mortgage and ride out this wild ride of inflation and cost pressures.

Use an offset account

If you've got a variable home loan, here's a nifty trick to keep your money working smarter: linking it to an offset account. Rather than parking your hard-earned cash in a high-interest account that could potentially get taxed, why not stash it in an offset account? This clever move can shrink your overall mortgage balance and slash the interest you're forking out.

Refinance your loan

Seriously, you might not even realise you're paying too much on your home loan. If you've got some home equity built up or have been with your lender for ages, you have the power to negotiate a lower rate with them or even a new lender. So, get out there and do some shopping around—you might even score a sweet cashback offer to go with your new, lower rate.

Pay principal and interest

So you're worried they might raise the rates even more? If you're tired of all the unpredictability and just want to plan your expenses ahead, why not switch to a fixed rate loan? You'll know exactly how much you owe every month, and there won't be any nasty surprises to ruin your day.

Change your payment cycle to fortnightly from monthly

If you switch your payment cycle from once a month to every two weeks, you could be saving yourself some serious cash. Well, there are 26 fortnights in a year - that's 2 more than the 12 months we all know and love. So by making payments every 2 weeks, you'll end up with 2 extra repayments per year without even noticing. It's like finding money in your couch cushions, except you don't have to dig around for it.

Get help

If you're finding yourself in a tough spot and feeling the weight of financial stress, remember that help is just a phone call away. First up, give your lender a buzz and have a good chat with their financial hardship team.

You can also reach out to the National Debt Helpline on 1800 007 007 for some independent advice on managing your debt. It's free, mate, and they've got your back.

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