Forget energy, the economy is Australia’s biggest problem
Article by Ben Tosi
After surviving the sweltering Australian summer with our air conditioners intact, we’re now becoming rapidly concerned with economic rather than energy issues, according to a recent survey from Roy Morgan Research.
The nationally representative survey of 650 Aussies found that a staggering 32% of us are seriously concerned with the country’s economic problems, dwarfing other issues like our growing distrust in politicians (13.9%).
A host of positive headlines regarding renewable energy has seemingly quelled our concerns over an energy crisis which dominated this same survey six months ago when 15% of Aussies admitted to being worried about energy - now, that number sits below 5%.
“In early 2018 the Economy, mentioned by 32% of Australians, again characterises the dominant theme representing the largest group of problems facing Australia,” said Roy Morgan Research’s CEO, Michele Levin.
“The most prominent Economic issues include Financial problems and the cost of living mentioned by nearly 10% of Australians, Unemployment mentioned by over 7% and Poverty and the gap between rich and poor mentioned by over 5% of respondents – all three were amongst the five most mentioned specific issues overall.”
Another rate hold does little for peace of mind
The RBA might have kept interest rates on hold for the 17th straight meeting, but that has done little to ease the growing concern over our precarious economic position down under.
According to Mozo Product Data Manager Peter Marshall, it’s a serious concern for Aussie borrowers - particularly those with a large home loan - who are already feeling the pressure from low wage and employment growth.
“Both employment and wages have experienced slower than expected growth which, as a result, is keeping pressure on many household budgets across the country,” said Marshall.
Earlier this month, Mozo reported on a Salvation Army report which claimed that 1 in 3 households would struggle to make ends meet if an RBA rate rise was to occur this year - prompting lenders to hike home loan rates.
And with experts predicting that exact scenario to play out before the RBA meet for the final time later this year, there is no wonder Aussie homeowners are so worried.
How to survive a rate rise
But it isn’t all doom and gloom.
If you’re part of the 10% of Aussies who feel that the cost of living - including mortgage repayments - is the most pressing problem in Australia, there are steps you can take to get ahead before the looming rate rise.
Make extra repayments, now
If you’ve got a little bit of wriggling room in your budget, put that extra money towards making extra mortgage repayments now while rates are low, which will save you in interest later.
Use an offset account
If your home loan offers this feature, take advantage of it. An offset account is a home loan feature attached to your mortgage that allows you to deposit money that offsets the principal of your loan, reducing the amount of interest you’ll pay.
Haggle, haggle, haggle
Haggling on your home loan rate is a must when it comes to surviving a rate rise. In fact, a Mozo mystery shop last year showed that you could save as much as $45,000 on your loan simply by asking for a better rate. Check out our haggling guide to equip yourself here.
Shop around and switch
Regularly reviewing your home loan is the best defence against a rate rise. Make sure you’re on the best offer possible and don’t be afraid to refinance if it means you’ll save in the long run. You can start this process by comparing a range of popular offers on the market using our home loan comparison tables.