THE TOUGH DECISIONS HOMEOWNERS FACE AS RATES RISE

Household budgets are set to be stretched further by the second interest rate rise in as many months, after the Reserve Bank raised the cash rate from 0.35 per cent to 0.85 per cent on Tuesday.

The hike will add $159 per month to repayments for the average homeowner, according to comparison website Finder, leaving many mortgagees considering how to meet these larger repayments. Some are cutting discretionary spending and cancelling Netflix subscriptions, while others are looking into tried and true formulas like refinancing their home loan. Mortgage brokers say more borrowers are asking about shifting to new lenders offering a better interest rate, or even a cash incentive, while others are demanding a better deal from the banks they have been loyal.

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