As the sun rises on January 1, many Australians will be getting started on their new year’s pacts. The gym will be full of determined resolution keepers; the pavement pounded by brand-new sneakers. But what about shaping up your finances?

There’s no denying 2022 was a tough year for many mortgage holders – with eight rate rises since the start of May – and unfortunately 2023 is tipped to bring more rate increases.

But by kicking off the year with a few tweaks to your budget and habits you could be in a much better position to ride out future hikes.

Here are 4 simple new year’s resolutions that can help keep your finances fighting fit.

1. Time to ditch unnecessary expenses?

The 2022 rate rises had a lot of us trimming back our budgets. But expenses can creep back in. Before you know it, those “free trials” you forgot to cancel become paid monthly subscriptions.

It’s good to get into the habit of conducting regular expense audits – cut down on streaming services, take-away meals and impulse purchases to make savings.

That said, you don’t have to become an extreme penny-pincher. Little tweaks here and there can add up.

For example, a daily $4 take-away coffee habit costs you $1460 per year! But switching to a DIY French press brew can cost just $260-$400.

2. Have you got an emergency buffer fund?

The last few years have taught us to expect the unexpected. Having money tucked away for emergencies, or more rate rises, can give you added peace of mind.

You can use unlocked savings from your expense audit to start building up an emergency buffer.

And consider adding even more to this fund by selling any unused or unwanted items on ebay or Gumtree.

That way, if rates go up further, you lose your job, or have unforeseen medical expenses, you’ll have the funds on hand.

And you can get rid of some clutter in the process. It’s a win-win!

3. Do you need to pay down a debt?

Christmas is a time many of us cut a little loose on our spending (and fair enough!). But it’s also important to make sure you pay off any debts quickly.

Now may be a good time to either start paying back any money owed on credit cards, get ahead on your mortgage (if you’re able to), or vanquish any other debts you might have.

Also, consider avoiding credit card or buy now pay later purchases if possible. If you forget to pay these on time, you could incur interest and/or late fees.

You may also find that quickly reducing debt tastes sweeter than a take-away mochaccino. And your credit score might thank you for it too, which can make purchasing your first home, new property, or refinancing that little bit easier.

4. When did you last review your home loan?

Last but not least, if you’ve had your home loan for a while, you could be paying something called “the loyalty tax”.

This is where lenders don’t pass on new borrower rates to existing customers.

An RBA study found that compared to new loans, borrowers are charged an average of 40 basis points higher interest for loans written four years ago.

Arranging regular home loan health checks can potentially uncover opportunities for savings.

Not only could you secure a lower interest rate, but you could refinance to a mortgage with other features that may be a better fit for your circumstances – such as an offset account, fixed period, or a linked debit card (to name a few).

To get started on your home loan health check and prepare for whatever 2023 throws at you, get in touch.

We’ll look at your financial footing, your mortgage, and the market to scope out suitable loan products and potential savings.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Repeated cash rate hikes have put many first home buyer plans on hold. So could you swoop in and reap the benefits with less competition in the market?

In case you missed it, from May to December the RBA lifted the cash rate from 0.10% to 3.10%.

This has no doubt hit many mortgage holders hard, but it’s also pumped the brakes on the number of first home buyers looking to enter the property market.

In fact, current Australian Bureau of Statistics data shows that the number of first-home buyers fell 3.2% to 8,576 in October alone.

That’s almost half the 16,187 first home buyers who entered the market during the January 2021 peak.

So, if you’re looking to buy, how can this benefit you?

Let’s take a look.

Less competition and more bargaining power

From mid-2020 to the end of 2021 we saw a house buying frenzy. And house hunters who were unable to compete had to make do with the leftovers.

But fewer buyers on the market means there’s less of a chance you’ll have to duke it out for your chosen property.

There could also be more favourable homes for you to choose from, without the overcrowded open houses.

And with fewer buyers making offers, sellers could have concerns about offloading their property.

November 2022 CoreLogic data shows the median days a property sits on the market is 35, compared to just 20 days in 2021.

So, if you’ve got your financial ducks in a row and are prepared to negotiate … flex that bargaining power and try for a great price.

Softening property prices

High demand in recent years saw property reach eye-watering prices. But over the past three months there’s been a decline around most parts of the country (barring regional South Australia and regional Western Australia).

In fact, national data has shown the biggest annual decline in home values since 2019, with a 3.2% drop over the past year.

In some instances, it could be cheaper to buy than rent. National median weekly rental prices rose by 4.3% in September this year – a record-breaking price hike.

And a recent analysis found that for 518 Australian suburbs, home loan payments were more affordable than renting.

Escaping the rent crunch and buying your first home in an opportune area could be a smooth move if your finances are in decent shape.

And you might want to get the ball rolling sooner rather than later.

That’s because prices could go up again as early as next year if the RBA pauses rate rises and inflation drops, according to SQM Research’s Housing Boom and Bust Report for 2023.

Government schemes for savings

Taking advantage of government incentives puts the keys in first home buyers’ hands 4 to 4.5 years quicker, on average.

Giving lenders mortgage insurance the big swerve, paired with a low deposit of 5%, is an enticing deal.

And if you’re eligible, that’s what the government’s First Home Guarantee can offer.

Spots are limited though and have historically been snapped up quickly.

But with fewer first home buyers entering the market, you may have more of a chance of nabbing a spot in the scheme.

Find out more

So, if you’re ready to make the big leap toward home ownership, give us a call.

We’ve got the know-how to help you work out your borrowing capacity and your mortgage options.

We’ll take the confusion out of financing your new home, so you can get on with swooping in on the house of your dreams.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.