Mortgage rate rises – How to alleviate some of the strain

Both the cost of living and interest rates are on the increase, leaving homeowners several hundred dollars out of pocket. Recently, three of the four big banks announced that despite the Reserve Bank keeping interest rates on hold, they will go ahead and increase their variable mortgage rates, leaving homeowners feeling a little anxious.

We’re a consumption economy and to alleviate the strain of the interest rate increase, there is a need to start thinking outside the box and start shopping smarter to save money. A simple way to do this? Start earning cashback on everyday necessities.

With Westpac raising their variable mortgage rates by 14 basis points (0.14%), this has meant that on a $300,000 mortgage homeowners will be paying an extra $35 per month, equal to a total of $420 per year. According to eChoice, the average home loan amount for NSW in 2018 is $456,100. So, if you base that same percentage on the average home loan in NSW, homeowners are sure to feel a nasty sting. And that’s just Westpac’s increase. The CBA has a rate rise of 15 basis point and ANZ 16 basis points according to an article by the ABC.

Below is the breakdown of the average home loan amount from 1975- 2018 in three states. The rate of increase clearly indicates the need for people to start thinking of how to make their money work for them. average-mortgage-BI.jpg Image credit: eChoice

Add to the mix life’s necessities, such as food prices that are always on the rise, and it’s enough to leave a sour taste in anyone’s mouth. An effective way to help offset these costs is simpler than you may think. Earning cashback from Cashrewards means you save on your everyday needs like groceries as well as other online purchases.

The cashback system was launched in Australia by Cashrewards in 2014, providing Aussies a smarter way to shop online and earn cashback (real money). That’s money from retailers that the consumer gets back just from shopping through a portal. Savings that eventually accumulate to a small fortune over a 12-month period.

In 2016, the Sydney Morning Herald reported that the average household grocery spend was $163 per week. Based on those calculations (presumably this has gone up in the last 2 years), this works out to be $8,476 per year. Using these figures, if you shop through CASHREWARDS and buy your groceries through Woolworths, you’ll earn 2% cashback on that spend. This works out to be $169.52 in savings per year.

Alternatively, savings can be made instantly by purchasing gift cards from Woolworths via Cashrewards. Gift cards having a 5% discount applied to them, saving you $5 on every $100 you spend.

If we use the same example of the average grocery spend from 2016, and purchase gift cards to the value of $8,476 over a year, your total savings work out to be $423. That is the cost of the rate increase on a $300,000 mortgage for the year based on Westpac’s 0.14% interest rate rise.

And that’s just by purchasing the gift cards and using them towards groceries. Woolworths gift cards can also be used at other retailers that fall under the Woolworths umbrella, saving consumers even more.

Cashrewards also offers cashback at over 1200 retailers including Dan Murphy’s, BWS and Harris Farm. And since we do eat out a lot and spend a big chunk of this on food delivery (on average $1,590 per household per year), Menulog is also on board with a 4% cashback rate.

Shopping and earning cashback is not just for those online purchases you tend to make sporadically. It can add real value to your everyday necessities and can alleviate some of the financial strain caused by rate rises.

When it comes to doing your weekly grocery shop, in order to save you money, all you have to do is be a little more prepared. Commit to a day when you can order your groceries online to save you from unplanned trips to the supermarket (also preventing you from buying addons you don’t really need) or buy the gift cards in advance and have them at the ready. Remember that most gift cards these days act like credit cards – you don’t have to use the full amount at once.

Earning cashback and taking up offers that are available through Cashrewards, will add real value to maximising your savings and financially assist when life starts becoming a little too expensive.

For more on how Cashrewards works, watch our 1 minute explainer here.


Some items in this article may not be eligible for cashback. Deals, products, displayed prices, cashback rates and available retailers through Cashrewards mentioned above may change at any time without notice. This article has not been specifically sponsored in any way, by any retailer, although Cashrewards has ongoing partnerships with the stores mentioned above in order to provide you cashback at these stores.

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