Another interest rate hike could be days away, and it would leave the average Aussie mortgage holder paying a brutal $578 more a month than at the start of the year.
But as borrowers brace for another hit, experts are warning one of the biggest budget killers may be far closer to home: Uber Eats, online shopping and other convenience spending quietly chewing through cash each month.
A Youi-commissioned survey found the average estimated monthly spend on unnecessary purchases is $165, with about half of respondents admitting they waste at least $100 a month. One in four said they splurge $200 or more, while a massive 93 per cent conceded they waste at least some money every month.
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That might not sound like much against the backdrop of a huge mortgage, but the long-term cost can be enormous.
A Savvy Finance analysis found putting an extra $165 a month into a $400,000 mortgage at 6.50 per cent per annum could save almost $62,000 in interest and wipe more than three years off the loan.
Takeaway dinners, late-night Uber Eats orders and online impulse buys are under fire as Aussies battle a looming rate rise and a worsening mortgage squeeze.
Even on the average $731,000 mortgage, paying just $50 extra a month – about the cost of one or two takeaway dinners – could shave close to $22,000 off the total loan bill and cut around seven months from the life of the loan.
Savvy mortgage broker Daniel Carter said Australians did not need to cut every treat entirely, but even scaling back could make a major difference.
“Making non-essential or convenience purchases shouldn’t need to be cut out entirely for most Australians to make a difference on their home loan,” he said.
“With cost-of-living creep continuing to keep a tight grip on many Aussies’ finances, it’s important for many to treat themselves every once in a while.
“Cutting back on takeaway by half, a third or even a quarter each month where you’re able to do so mightn’t be exactly what you want, but it could deliver savings to the tune of tens of thousands across the life of your mortgage.”
The warning comes at a brutal time for households, with fresh inflation figures ramping up fears the Reserve Bank will lift rates again on Melbourne Cup day.
Markets are now pricing in about a 62 per cent chance of a 0.25 percentage point rate hike on November 3, which would take the cash rate to 4.85 per cent – the highest level in 18 years and the fifth increase this year.
For borrowers, another increase would add about $16 to $17 a month in repayments for every $100,000 borrowed on a variable mortgage.
For a typical homeowner with a $731,000 loan, that would leave monthly repayments about $578 higher than they were at the start of the year.
The fresh hike threat is likely to deepen anxiety in households already worried about bills.
A separate study by premium appliance brand Electrolux found Brisbane residents are the most worried about household bills in the country, recording a Worry Score of 78.30 out of 100.
Adelaide ranked second, followed by Perth, Canberra and Darwin.
Melbourne, Hobart and Sydney residents were found to be the least concerned about household bills relative to their population.
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