‘Simple’ move could save households $7388 over the year

Aussies can offset the skyrocketing cost of living with a few simple measures, money experts have revealed. See the list.

Australians could offset the rising cost of living and save up to $7,388 over a year by reviewing their current insurance policies, home loan, energy provider, credit cards and car loan.

The average Australian household could save $2,606 alone on their home loan repayments by switching their lender, according to analysis by Compare Club.

The annual savings figure is higher than the figure reported by Compare Club in 2022 when they last undertook a similar analysis.

Back then, the average customer could save $6,622 over the course of 12 months by switching providers on numerous policies and loans. The research was based on modelling of the average Australian mortgage size and loan products, among other measures.

The Reserve Bank of Australia has lifted the cash rate 11 times since April last year. Picture: NCA NewsWire / Nikki Short

Compare Club CEO Andrew Davis said these kinds of savings are what Australians are missing out on when they stay loyal to lenders and service providers.

It comes as Finder.com.au analysis showed Australians with an average loan size of $586,000 will be forking out around $14,000 more per year compared to what they were paying this time last year due to successive interest rate rises.

More than two in five (43 per cent) of Australians said their rent or mortgage was one of their most stressful expenses in April – the highest level since Finder’s Consumer Sentiment Tracker started in May 2019.

Mr Davis said shopping around for a better deal in the current climate of record interest rate rises and soaring petrol and utilities costs would help the hip pocket.

“With so many costs going up over the past year, we’re seeing a lot of Australian households increasingly squeezed when it comes to finances, but they’re also able to get a significant reprieve when they switch a major expense such as their mortgage, car loan or health insurance,” Mr Davis said.

“It can seem quite daunting, especially for complicated products such as health cover or a home loan, so it’s understandable that some people feel the effort to switch just isn’t worth it.

“But we often find people are genuinely surprised by how much they can save and how simple it can be.”

Customers with a car loan could save an average of around $2,600 by refinancing, while there’s around about $713 on average to be saved on credit card interest repayments annually, according to Compare Club.

Changing energy providers would result in $274 of average savings in NSW, $321 in Queensland and $183 in Victoria. Potential savings for shopping around for a different health insurance provider averaged $300 for individuals and $375 for families.

“Without realising the potential savings, Australians are missing out on thousands of dollars a year – it’s enough to cover school laptops for two or three kids.

“There are also the benefits of improved product features, chosen to be relevant to the lives of customers now, rather than when they originally purchased the product.”

Mr Davis recommended looking at the biggest savings first. “You don’t have to overhaul all your finances in one sitting, but there are serious savings to be made even by just reviewing your home loan,” he said.

“How much the cost of loans, energy and insurance will increase over the coming months is somewhat unpredictable but every household has the power to be able to seriously cut their costs with just a few phone calls.”

According to the latest Proptrack Home Price Index, national home prices continued to stabilise in April after rising for the fourth consecutive month, rising 0.14 per cent. The cumulative increase in 2023 is now 0.75 per cent. Strong migration, tight rental markets and limited supply are offsetting the impact of rapid interest rate rises.

Originally published as ‘Simple’ move could save households $7388 over the year