by Ted Richards

Click to listen to the latest episode of The Richards Report featuring News Corp personal finance writer Sophie Elsworth.

In this episode of the podcast I speak with Sophie Elsworth. Sophie is a personal finance writer for News Corp, so you may be familiar with her articles in the Daily Telegraph and Herald Sun, or other News Corp mastheads around the country.

Sophie specialises in personal finance with real, actionable tips for Australians to improve their financial situation with achievable changes that can be made right now.

As you’re probably aware interest rates in Australia have been going down. It seems like not that long ago, but back in 2011 the RBA cash rate was 4.75% – after further cuts recently the RBA cash rate now sits at 1%. It’s hard to forecast future interest rates, but the big four banks have already priced in another cut to interest rates by November, which would bring the rate down even further to 0.75% (time will tell if that prediction plays out or not).

So who are the winners and losers from interest rates going down?

Low interest rates: The winners

The ripples of interest rate changes are felt in different ways all through the economy, but when it comes to personal finance it’s mortgage holders that are the winners (as mortgage debt is becoming cheaper). If you have a variable mortgage and it’s going down that doesn’t mean you can’t get an even better rate. Sophie describes some simple steps to get your mortgage rate even cheaper.

To get a better deal:

  1. Ask to speak to your mortgage provider’s home loan retention team (it may take a few days to speak to someone).
  2. Educate yourself and be armed with some better rates in the market.
  3. Speak with confidence and talk tough to your bank. You can threaten to leave if they don’t come to the party and drop your rate on the spot.
  4. Remember this is no time to worry about loyalty.

I followed Sophie’s advice and got my rate reduced. (Note: during the podcast recording I thought my rate was 4.1%, but I forgot to factor in the two recent cuts so it had come down to 3.6%. But, heeding the advice from Sophie, I called up and asked for a better rate and over the phone they dropped it to 3.45% on the spot!)

If you do leave, remember that mortgage exit fees were banned after 2011. Yes it’s a pain to switch but Sophie mentions the ‘Tick and flick’ program, which can help with some personal admin.

When looking around at other rates, remember that the advertised rate will be in bright lights but don’t forget to look at the comparison rate, which takes into all the fees (this is the real rate). Also remember that the comparison rate is based on a mortgage of $150,000, which is well under the average mortgage in Australia.

Low interest rates: The losers

Savers and retirees who are likely to have large amounts of money in a savings account are the losers when interest rates are low, as their returns will drop. Women may also lose from this as data suggests that women typically take less risk with their investments than men. So if you intend to keep money in cash and park it in a savings account long-term your returns will suffer as interest rates stay low.


When it comes to paying insurance premiums it’s so often set-and-forget. Sophie provides a great tip: “Never auto renew!” Yes, it’s easy to do this but insurance providers may capitalise on your laziness with large increased premiums each year (remember it’s not uncommon for insurance premiums to go up 10% in a year).

Sophie describes how we can apply a similar strategy to our mortgage with our insurance providers and asking for a better rate. You don’t actually have to change providers – the threat to leave will often be enough to get a better rate. Something new happening this financial year is that insurance providers now must detail what last year’s premiums were so we can easily compare the new premium.

Tax returns

Sophie mentions that the ATO has had to put on more staff this financial year due to the influx of people wanting to get their tax return sooner. Remember, there’s no rush and if you get a refund, use it wisely. You might be tempted to splurge any new funds but try not waste any windfalls. Topping up your Six Park portfolio could be a great way to boost your long-term wealth!

Helpful websites


Log into myGov to make sure you don’t have more than one super fund. Stray super funds can be recovered and consolidated. As of July 1 inactive super funds will no longer be covered with insurance so it could be good to double check if this is applicable to you.

MoneySmart government website

Great tools and tips to further educate yourself on personal finance

Start your investment journey with Six Park by taking our free risk assessment – click the button below.

Published July 18, 2019