Budget busters: three simple ways to save up to $4K in 2021

Budget busters: three simple ways to save up to $4K in 2021

Start the New Year with more money in your pocket by making some simple changes to your budget in 2021.

With JobKeeper and JobSeeker cuts about to kick in, millions of Australians will be starting 2021 on the back foot.

However, there are steps you can take to get your finances in the best shape possible, potentially saving as much as $4,098.

Potential annual household savings:

  1. Home loan – negotiate and save up to $3,412.
  2. Credit card – switch and save up to $416.
  3. Phone plan – change providers and save up to $270.

1. HOME LOAN – haggle and save up to $3,412

One of the biggest expenses in the family budget is the mortgage. It’s also one of the areas where you can save the most, just by calling your bank.

Savings on the average $400K owner-occupier loan

  Average rate Savings after 1 yr
Existing owner occupier



New customer variable rate



New fixed rate (1 – 3 years)



Notes: based on an owner occupier paying principal and interest, haggling 5 years into a 30-year loan with a $400,000 loan balance. Does not include fees. Average rates are from the RBA.

RateCity.com.au research director Sally Tindall said: “Check what your bank is offering new customers for both fixed and variable loans, then pick up the phone and haggle.

“While most banks’ lowest rates right now are fixed ones, locking in your rate isn’t for everyone. If you’re planning on getting ahead on your mortgage, or selling in the next few years, you might be better off sticking with a variable rate as they’re typically more flexible,” she said.

2. CREDIT CARD – switch and save up to $416

If you have a rewards credit card from a big four bank, it could be burning a hole in your pocket through high fees and / or rates.

“Make 2021 the year you review your credit card. Work out if it’s sending you backwards and look for alternatives that can save you money,” said Tindall.

“You might find you’re better off switching to a low-rate card, opting for a no-fee card, or going without one altogether.

Possible savings (based on a revolving $2K debt accruing interest)

  Average annual fee Average rate Potential savings

(up to)

Big four bank rewards card



No annual fee credit card




Low rate credit card




Notes: Calculations are estimates only. Exact savings are dependent on debt accruing interest, fees and rewards provided. Cards with a purchase rate under 10% are considered low rate.

LOW RATE OPTIONS - there are 15 providers offering credit cards under 10%.

  Rate Annual fee
G&C Mutual Bank Low Rate Visa 7.49% $50
Auswide Low Rate Visa 8.05% $50
American Express Low Rate Card 8.99% $0

LOW FEE OPTIONS - there are over 30 cards with no annual fee, several of which offer rewards points.

  Annual fee Rate Rewards
Coles No Annual Fee Mastercard $0 19.99% Flybuys points, insurances
HSBC Premier World Mastercard $0 19.99% HSBC rewards points, insurances
AMEX Essentials $0 14.99% AMEX rewards points, insurances

3. PHONE PLAN – switch and save up to $270

Phone plans are one of the few bills that have dropped in recent years, however, shopping around is still worthwhile – even supermarkets are getting in on the action. You might not even have to sacrifice on coverage as many of the smaller providers run off the Telstra or Optus networks, often at a fraction of the price.

“If you haven’t reviewed your phone plan for a while, it’s probably time to do a health check. A drop of $10 or $15 each month might not seem like a lot, but the savings can really add up, especially if you’ve got a few phones in your household,” she said.

Phone plan examples:

  Data Calls & texts Cost /mth Av. days in mth Approx annual cost
Telstra mobile plan 40GB Unlimited




Aldi Mobile 40GB Unlimited




Amaysim 50GB Unlimited




Note: the above plans are SIM only or pre-paid plans. Cost is based on an average daily rate over a 365 day year but actual cost over 2021 will be based on contract start date and billing dates. Only a selection of providers are displayed to be used as examples only. Customers should do a full comparison based on their needs.


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Learn more about home loans

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

Why should I get an ING home loan pre-approval?

When you apply for an ING home loan pre-approval, you might be required to provide proof of employment and income, savings, as well as details on any on-going debts. The lender could also make a credit enquiry against your name. If you’re pre-approved, you will know how much money ING is willing to lend you. 

Please note, however, that a pre-approval is nothing more than an idea of your ability to borrow funds and is not the final approval. You should receive the home loan approval  only after finalising the property and submitting a formal loan application to the lender, ING. Additionally, a pre-approval does not stay valid indefinitely, since your financial circumstances and the home loan market could change overnight.



Can I apply for an ANZ non-resident home loan? 

You may be eligible to apply for an ANZ non-resident home loan only if you meet the following two conditions:

  1. You hold a Temporary Skill Shortage (TSS) visa or its predecessor, the Temporary Skilled Work (subclass 457) visa.
  2. Your job is included in the Australian government’s Medium and Long Term Strategic Skills List. 

However, non-resident home loan applications may need Foreign Investment Review Board (FIRB) approval in addition to meeting ANZ’s Mortgage Credit Requirements. Also, they may not be eligible for loans that require paying for Lender’s Mortgage Insurance (LMI). As a result, you may not be able to borrow more than 80 per cent of your home’s value. However, you can apply as a co-borrower with your spouse if they are a citizen of either Australia or New Zealand, or are a permanent resident.

How long does Bankwest take to approve home loans?

Full approval for a home loan usually involves a property valuation, which, Bankwest suggests, can take “a week or two”. As a result, getting your home loan approved may take longer. However, you may get full approval within this time if you applied for and received conditional approval, sometimes called a pre-approval, from Bankwest before finalising the home you want to buy.  

Another way of speeding up approvals can be by completing, signing, and submitting your home loan application digitally. Essentially, you give the bank or your mortgage broker a copy of your home’s sale contract and then complete the rest of the steps online. Bankwest has claimed this cuts the approval time to less than four days, although this may only happen if your income and credit history can be verified easily, or if your home’s valuation doesn’t take time.

What happens to my home loan when interest rates rise?

If you are on a variable rate home loan, every so often your rate will be subject to increases and decreases. Rate changes are determined by your lender, not the Reserve Bank of Australia, however often when the RBA changes the cash rate, a number of banks will follow suit, at least to some extent. You can use RateCity cash rate to check how the latest interest rate change affected your mortgage interest rate.

When your rate rises, you will be required to pay your bank more each month in mortgage repayments. Similarly, if your interest rate is cut, then your monthly repayments will decrease. Your lender will notify you of what your new repayments will be, although you can do the calculations yourself, and compare other home loan rates using our mortgage calculator.

There is no way of conclusively predicting when interest rates will go up or down on home loans so if you prefer a more stable approach consider opting for a fixed rate loan.

What is the average annual percentage rate?

Also known as the comparison rate, or sometimes the ‘true rate’ of a loan, the average annual percentage rate (AAPR) is used to indicate the overall cost of a loan after considering all the fees, charges and other factors, such as introductory offers and honeymoon rates.

The AAPR is calculated based on a standardised loan amount and loan term, and doesn’t include any extra non-standard charges.

What is the difference between a fixed rate and variable rate?

A variable rate can fluctuate over the life of a loan as determined by your lender. While the rate is broadly reflective of market conditions, including the Reserve Bank’s cash rate, it is by no means the sole determining factor in your bank’s decision-making process.

A fixed rate is one which is set for a period of time, regardless of market fluctuations. Fixed rates can be as short as one year or as long as 15 years however after this time it will revert to a variable rate, unless you negotiate with your bank to enter into another fixed term agreement

Variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts however fixed rates do offer customers a level of security by knowing exactly how much they need to set aside each month.

What is the difference between fixed, variable and split rates?

Fixed rate

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

Variable rate

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

Split rates home loans

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still wants to retain some of the additional features variable loans typically provide such as an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

What is a honeymoon rate and honeymoon period?

Also known as the ‘introductory rate’ or ‘bait rate’, a honeymoon rate is a special low interest rate applied to loans for an initial period to attract more borrowers. The honeymoon period when this lower rate applies usually varies from six months to one year. The rate can be fixed, capped or variable for the first 12 months of the loan. At the end of the term, the loan reverts to the standard variable rate.

What is a variable home loan?

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

What is a comparison rate?

The comparison rate is a more inclusive way of comparing home loans that factors in not only on the interest rate but also the majority of upfront and ongoing charges that add to the total cost of a home loan.

The rate is calculated using an industry-wide formula based on a $150,000 loan over a 25-year period and includes things like revert rates after an introductory or fixed rate period, application fees and monthly account keeping fees.

In Australia, all lenders are required by law to publish the comparison rate alongside their advertised rate so people can compare products easily.

What is a standard variable rate (SVR)?

The standard variable rate (SVR) is the interest rate a lender applies to their standard home loan. It is a variable interest rate which is normally used as a benchmark from which they price their other variable rate home loan products.

A standard variable rate home loan typically includes most, if not all the features the lender has on offer, such as an offset account, but it often comes with a higher interest rate attached than their most ‘basic’ product on offer (usually referred to as their basic variable rate mortgage).

What is the best interest rate for a mortgage?

The fastest way to find out what the lowest interest rates on the market are is to use a comparison website.

While a low interest rate is highly preferable, it is not the only factor that will determine whether a particular loan is right for you.

Loans with low interest rates can often include hidden catches, such as high fees or a period of low rates which jumps up after the introductory period has ended.

To work out the best value for money, have a look at a loan’s comparison rate and read the fine print to get across all the fees and charges that you could be theoretically charged over the life of the loan.

How can I get ANZ home loan pre-approval?

Shopping for a new home is an exciting experience and getting a pre-approval on the loan may give you the peace of mind that you are looking at properties within your budget. 

At the time of applying for the ANZ Bank home loan pre-approval, you will be required to provide proof of employment and income, along with records of your savings and debts.

An ANZ home loan pre-approval time frame is usually up to three months. However, being pre-approved doesn’t necessarily mean you will get your home loan. Other factors could lead to your home loan application being rejected, even with a prior pre-approval. Some factors include the property evaluation not meeting the bank’s criteria or a change in your financial circumstances.

You can make an application for ANZ home loan pre-approval online or call on 1800100641 Mon-Fri 8.00 am to 8.00 pm (AEST).