Rising interest rates are a scary prospect for many Aussies, especially those with a mortgage, but it may be reassuring to know that the average borrower is ahead of their home loan repayments. Data from the Australian Prudential Regulation Authority (APRA) has shown that the average borrower is 45 months ahead of their repayments, a figure which has increased from 32 months prior to the pandemic. Furthermore, those with interest-only repayments are an average of 52 months ahead.

With everyone stuck at home and fewer opportunities to spend money, the pandemic generally created positive saving opportunities. The numerous lockdowns imposed around our country encouraged many Aussies to grow their savings and consequently, $50 billion has been added to offset accounts. In combination with low-interest rates and government support, this has placed borrowers in a good position when it comes to their home loan repayments.

Being ahead of your repayments will protect you from future rate rises by providing a buffer; and if you pay off your mortgage sooner, you’ll pay less interest and build up more equity. While it’s pleasing to know that many people are ahead of their repayments, this simply isn’t achievable for everyone.

Although positive in theory, the reality is that home loan repayments are a burden for many Aussies and the increasing interest rates are not helping. With interest rates inevitably rising, here are a few ways to cope with your repayments and manage the household budget within this higher-rate environment.