Finance expert David Koch has shared a practical guide for Australians coping with another interest rate rise. In an article published on Sunday, 10 May 2026, Koch outlined strategies to manage the financial strain as the Reserve Bank of Australia continues its tightening cycle.
Understanding the Impact
Koch emphasised that each rate increase adds hundreds of dollars to monthly mortgage repayments. For a typical borrower with a $500,000 loan, a 0.25 percentage point rise means an extra $80 per month. Over a year, that adds up to nearly $1,000.
Step 1: Review Your Budget
The first step, according to Koch, is to review your budget. He recommends tracking all income and expenses for a month to identify areas where you can cut back. Small changes, like reducing dining out or cancelling unused subscriptions, can free up cash.
Step 2: Refinance Your Home Loan
Koch advises homeowners to shop around for a better deal. Refinancing can lower your interest rate by up to 1 percentage point, saving hundreds each month. He suggests comparing offers from different lenders and negotiating with your current bank.
Step 3: Build an Emergency Fund
Having a safety net is crucial. Koch recommends saving three to six months of living expenses in an accessible account. This buffer can help you weather unexpected costs or job loss.
Additional Tips
- Consider fixing part of your loan to lock in a lower rate for a set period.
- Use offset accounts to reduce interest on your mortgage.
- Cut discretionary spending like entertainment and travel.
- Boost income through side hustles or overtime.
Koch also warned against dipping into superannuation early, as it can hurt long-term retirement savings. Instead, he suggests seeking free financial counselling if you are struggling.
For more advice, read the full article in The West Australian.
