Another interest rate rise. Not exactly the news Aussie mortgage holders were hoping for.

But while higher rates can mean bigger repayments and tighter household budgets, they can also be a prompt to get a little smarter with your money. Are you getting a decent return on your savings? Could you be paying less on your mortgage? And can you keep building your investment portfolio, even if there’s less room in the budget?

On Tuesday 3 November, the Reserve Bank of Australia (RBA) increased the official cash rate by another 0.25 percentage points, taking it to 4.85%. It’s the fifth increase this year, bringing the cumulative rise to 1.25 percentage points.

With inflation proving stubborn, there’s no guarantee this will be the last rate move we’ll see. So rather than simply absorbing the extra costs, it’s worth looking at what you can control.

Here are five ways to give your finances a bit of a tune-up.

1. Shop around for a better savings rate

When was the last time you checked the interest rate on your savings account? If the answer is ‘not for a while’, you’re probably not alone. It’s easy to open an account, set up an automatic transfer and forget about it. But banks don’t always pass on RBA rate increases in full to savers, which means you could be leaving money on the table.

Start by comparing high-interest savings accounts across different banks. Don’t just look at the advertised headline rate, either. Check the ongoing rate and what you’ll actually need to do to qualify for it.

Some accounts offer attractive introductory or ‘honeymoon’ rates that last just a few months before dropping away. Others require you to deposit a minimum amount each month, grow your balance or limit withdrawals to qualify for bonus interest. It’s worth reading the fine print before making the switch, as a slightly lower rate with fewer conditions could leave you better off in the long run.

For example, an account offering 5% interest for four months before reverting to 3.5% might look more appealing than one offering a consistent 4.25%. But on a $50,000 balance, the first account would earn approximately $1,875 over the year, compared with $2,125 for the second, assuming monthly compounding and unchanged rates. That’s $250 less, despite the higher introductory offer.

Even seemingly small differences in interest rates can add up. An extra 0.25 percentage points on a $50,000 balance would earn you another $125 over a year, while someone with $100,000 could pocket an additional $250. It might not be a windfall, but it’s money that could go towards your next investment or help cover an upcoming expense.

2. Could your offset account be a better home for your savings?

If you have a mortgage with an offset account, it’s worth checking whether your spare cash would be better off sitting there.

An offset account is linked to your home loan, with its balance deducted from your outstanding mortgage when your lender calculates interest. For example, if you have a $600,000 mortgage and $30,000 sitting in a full offset account, you’ll generally only pay interest on $570,000. In other words, you’re effectively getting a return by paying less interest on your mortgage, rather than earning interest from a savings account.

And there’s another advantage: for an owner-occupied home loan, the interest you save is generally tax-free, whereas interest earned in a savings account is taxable.

As mortgage rates climb, the savings from an offset account can become even more valuable. However, it’s not automatically the best option for everyone. Compare your mortgage interest rate with the after-tax return you could earn on a savings account or term deposit. Also check whether your loan has a full or partial offset and whether you’re paying extra fees or a higher interest rate for the feature.

The good thing about an offset is that your money remains accessible. You can keep your emergency savings there while reducing the interest charged on your mortgage.

3. Pick up the phone and negotiate a better mortgage rate

Loyalty doesn’t always pay when it comes to banking. In fact, existing mortgage customers can sometimes find themselves paying more than new customers simply because they’ve never asked their lender for a better deal. If your bank passes on the latest rate increase, consider using it as an opportunity to review your loan.

Before contacting your lender, do some homework. Compare rates from other banks and lenders, making sure you’re looking at similar loan products and features. Consider your loan-to-value ratio (LVR), too, as borrowers with more equity may have access to more competitive rates. Then get in touch with your bank or mortgage broker and ask whether there’s room to sharpen your rate.

A few questions worth asking:

• Can you offer me a more competitive interest rate on my existing loan?
• Are there any retention discounts or loyalty offers available?
• Am I eligible for a better deal based on my current loan balance and repayment history?
• Would switching to another loan product with the same lender save me money?

Don’t be afraid to mention a more competitive offer you’ve found elsewhere. Banks would often rather retain an existing customer than lose them to a competitor.

Even a small reduction can add up. On a $600,000 mortgage, a 0.25 percentage point reduction could save approximately $1,500 in interest over the first year, assuming the balance stays constant. Just remember to factor in refinancing costs, discharge fees and any changes to loan features before jumping ship.

For more guidance, check out our article on getting a lower interest rate on your mortgage.

4. Give your household budget a once-over

Higher mortgage repayments can put a serious dent in your disposable income. And when groceries, insurance, energy bills and just about everything else seem to be getting more expensive, finding room in the budget can feel like a tall order.

Rather than cutting back on everything you enjoy, start with a quick financial audit. A useful starting point is to separate your spending into essential expenses, discretionary purchases and financial commitments such as debt repayments. Look at your actual spending over the past three months rather than relying on what you think you spend. Even freeing up $50 a week gives you an extra $2,600 a year that could go towards your mortgage or savings.

It’s also worth checking your emergency fund. Ideally, you’ll have enough accessible cash to cover several months of essential expenses. This is particularly important if you have a mortgage, dependants or an irregular income. Having that buffer means you’re less likely to need to rely on credit or sell investments at an inconvenient time when an unexpected bill comes along.

The goal isn’t to strip all the fun out of your budget but to make sure you’re spending intentionally and leaving enough room for your financial priorities.

5. Try to keep investing, even if you need to scale back

When money gets tight, investing can feel like a luxury. If mortgage repayments are eating into your disposable income, it might be tempting to pause your contributions altogether. And if you genuinely need the cash to cover essential expenses, that’s absolutely fine. Your financial security comes first.

But if you can afford to keep investing, even in smaller amounts, there’s value in maintaining the habit. For example, if you’ve been investing $500 a month but rising household expenses mean that’s no longer manageable, you could temporarily reduce your contributions to $100 or $200.

Regular investing, sometimes called dollar-cost averaging, involves putting a consistent amount into the market at regular intervals rather than trying to pick the perfect time to buy. You’ll naturally buy more units when prices are lower and fewer when they’re higher. It doesn’t guarantee returns or protect you from market losses, but it can make investing feel more manageable and remove some of the pressure to time the market.

Interest rate increases can also affect different investments in different ways. Higher borrowing costs can put pressure on some businesses and share valuations, while cash and fixed-income investments may become more attractive. That doesn’t mean you need to overhaul your portfolio every time the RBA meets. Instead, check that your investments still reflect your financial circumstances and how long you intend to stay invested.

If you’re investing for the long term, reacting to every economic announcement can do more harm than good. A well-considered strategy should account for market ups and downs, rather than depend on getting every decision right. And if you need to scale back contributions for a while, that’s not failure. You can always revisit your budget and increase them again when things become more comfortable.

Your interest rate rise checklist

Want to make the most of your money while rates are higher? Start here:

• Compare savings accounts: Check whether another bank offers a better ongoing rate, and read the fine print on introductory offers.
• Review your offset: Work out whether keeping spare cash in your offset could save you more interest than a savings account would earn.
• Contact your lender: Ask your bank or broker whether you qualify for a lower mortgage rate.
• Audit your spending: Review recent bank statements and identify expenses you could reduce or eliminate.
• Check your emergency fund: Make sure you have enough accessible cash to cover unexpected expenses.
• Review your investments: Check that your portfolio still suits your financial goals and risk tolerance.
• Adjust your contributions if needed: If money is tight, consider reducing your regular investment amount rather than stopping altogether, provided your essential expenses and financial buffer are covered.

A little financial housekeeping can go a long way

You can’t control what the RBA does next. But you can make sure you’re getting a decent deal on your savings and aren’t paying more than necessary on your mortgage.

If rising repayments mean you need to temporarily reduce your investment contributions, that’s okay. The important thing is to keep your longer-term goals in sight and pick things back up when your budget allows.

A rate rise might not be welcome news, but it can be a useful reminder to check that your money is working as hard as it should be.

Disclaimer: This article is general in nature and has been prepared without taking into account your individual objectives, financial situation or needs. It does not constitute financial, tax, credit or investment advice, nor should anything in it be taken as a recommendation to change your savings arrangements, mortgage, borrowing or investment strategy. Interest rates, savings account conditions and loan features can vary between providers and may change over time. Before making financial decisions, consider whether the information is appropriate for your circumstances and seek advice from a qualified financial adviser, mortgage broker or other relevant professional where necessary.