Rate rise

How to calculate repayments and plan your budget around home loan rate rises

There’s no use following an outdated budget, so when home loan rates rise, it’s wise to recalculate and rethink your household budget. But where do you even start? With a few simple steps, we’ll guide you through recalculating your repayments and budgeting like a pro.

Rising interest rates are unfamiliar to many homeowners, and this means an adjustment for your home loan repayments and likely your budget too.  

The key to keeping your finances in shape is to adapt and plan ahead.

Scenario plan

Interest rates are notoriously hard to predict, so it’s useful to consider a range of scenarios. Understanding what your repayments might be across a range of possible rate rises will allow you to effectively plan ahead. 

Our table below outlines a series of possible rate changes and how it could change the monthly repayments on a variable rate loan.

If you have a home loan of $500,000, a 0.1% rate rise may increase your monthly repayments by $28. If rates increase 0.25%, that’s an increase of $71 per month. In the scenario of rates increasing by 0.5%, your monthly repayments could increase a further $143.

Value of your home loan If rates rise by 0.10% If rates rise by 0.25% If rates rise by 0.5%



$57 $114



$71 $143



$86 $172

Our loan repayment calculator allows you to plug in your own specific loan details to find out what each rate rise might mean for you. 

Calculations are estimates and the sample figures are provided as a guide for demonstration purposes only.  You may wish to consider professional advice from financial counsellors and licensed financial adviser. 

7 strategies to keep your money in your pocket

Follow these 7 strategies to help you keep your money in your hip pocket, even as interest rates rise.

1. Budget, budget, budget

Did we already say budget?

We cannot stress enough how important a budget is for tracking your spend, following a plan and setting aside emergency funds or savings.  

Try a budgeting app like Frollo or MoneyBrilliant and take your budget with you while you’re on the go.

Or head to My Money for more saving and budgeting tips.

2. Take back the power

With the price of power continuing to climb, it’s time to go deal hunting.

Longstanding customers typically find they’re paying more than they could be with a new provider, and sites like Energy Made Easy can help you determine whether that’s you.

By providing your current provider details and household power use, you can compare how your power bills compare with what you’d be paying somewhere else.

Michael T from Sydney did just that. “It turns out we’re on a really old – and expensive plan,” he says. “I was amazed at how much I can save – easily $800 a year, just by moving to another electricity provider.”

3. Shop smarter

Grocery expenses can eat into your budget if you don’t shop smart. By changing where you shop you can unlock some decent savings. For example, shopping at Aldi could reduce your annual grocery bill by up to $2,468.

Shopping local can also make a world of difference. Ayushma R and her partner now shop at Flemington Markets in Sydney and have shaved a significant amount off their grocery bill.

“It’s a really fun day out,” Ayushma says. “Lots of atmosphere, plenty of free samples, and the fruit and veggies are so much cheaper than in the big stores. We’ve cut at least $50 off our fortnightly grocery bill.”

4. Take your renewals off auto-pilot

Renewals roll around so quickly, and it can be easy to simply pay your bill and lock yourself in for another year. Before auto-renewing your next bill, such as your insurance, take a moment to research whether you could be getting a better deal somewhere else.

Shopping around ensures you’re getting the best value for your dollar and can sometimes mean new customers a discount.

We love a deal, just as much as the next person, but make sure you’re not only focused on the savings, but also factor in whether the new cover is right for you.

5. Home-made all the way

Chris F was on a cost-cutting mission. Shocked by how much he was spending on home delivery food apps, he decided to take to the kitchen and focus on home cooked meals instead. 

Chris says, “I’d fallen into the habit of ordering a lot of home delivered meals, and the cost was really starting to add up.

“I signed up for emails showing the latest supermarket specials, so I compare prices, buy whatever’s discounted, and then check out free recipes online to try something new.

“My homemade butter chicken has become a crowd favourite, and spiced lime chicken tacos are pretty popular too. I’m easily saving $80 a week.”

6. Unsubscribe

It’s likely that you’ve signed up to subscriptions you don’t need anymore, or you’re getting little value from.

Gym memberships are the perfect example. The average gym membership costing $19.70 per week, and shockingly one in ten people with a gym membership go to the gym once a year or not at all, and five percent visit the gym once every six months, which works out to $512 per session.

7. The time is now!

Don’t wait, start today with these few simple steps and feel more in control of your money right away.