So what does this mean for the average person wit a mortgage? Well I suspect that at first it will be a bit of shock to see our repayments go up yet again. We will find the extra few dollars per month and battle on. Maybe we will think twice about buying that extra bit of beer or not go to the movies. Others will rearrange their budgets to match the increase in payments.

Here’s food for thought.

Say you were paying extra into your super fund. Salary sacrificing. It makes sense to do this as the government is paying us extra to match our extra payments. If you aren’t doing this then start. Its money for nothing. An extra $20 a week out of your pay packet into the super fund. Just do it.

Anyway, for those of us doing this , now we can ease back a little and only pay $15 a week extra into our super and send the other $5 to match the interest rate hike. Makes sense eh?

Work the numbers out yourself for your own situation and just do it. Interest rate are just going to keep going up so get ready with this simple little strategy. Those of old enough still remember the pain and hurt that $16% interest caused to our businesses and family life. Absolute madness and destruction al;l round.

Lets hope we’re not headed there again. !