Written

For

The

Australian

-

How

to

beat

rising

interest

rates

and

cut

your

mortgage

costs

Remember when we were all pencilling in rate cuts for 2026? That ship has well and truly sailed. With the RBA lifting the cash rate to 4.35 per cent this week — its third hike this year — and the sharemarket now tipping a peak of 4.8 per cent by March, mortgage holders need to stop hoping and start acting.

The good news? There are levers you can pull right now to take real money off your interest bill.

Start with the most underused phone call in personal finance: ring your lender and ask for a pricing review. Better still, get a mortgage broker to line up a competing pre-approval first. Walking in with leverage works. Lenders would rather shave 5 to 20 basis points off your rate than lose you to the retention team's worst nightmare — a refinance to a competitor offering cashback.

Next, the offset account. I've lost count of how many clients I've met who keep six figures sitting in a "rainy day" transaction account while paying 6 per cent interest on a mortgage. Same access, vastly different outcome. On a $1m loan with $100,000 offset, you're charged interest on $900,000. That's thousands a year, gone.

Then take it further: pump your salary straight into the offset, run daily spending through a credit card with an interest-free period, and clear the card on the due date — not a day earlier. Cancel direct debits that fire weeks ahead of schedule. Every dollar that lingers in the offset, even for 24 hours, reduces your interest bill.

If cashflow is genuinely tight, ask your lender to reset repayments to reflect your redraw balance. Just be honest with yourself about how much buffer you actually need.

We could be staring down home loan rates of 6.5 to 7 per cent before this cycle plateaus. Hope isn't a strategy. Action is.