Despite the latest rise, indications are that we are getting close to the top of the interest rate cycle and rates will stay flat or start to reduce over the next year.

However, this is of little comfort to those who are struggling to make ends meet because their housing repayments have increased by $150 a week or more.

Mortgage stress is a scary experience, but not half as frightening or expensive as being forced to sell your home, rent elsewhere and then re-buy when your finances improve.

That exercise could cost you more than $40,000. This is why it’s important to do everything in your power to hang on to your home. Here are some tips.

1. Can you find more money by cutting back on non-essential items or by one or more of the family members getting a second job? An extra $100 a week coming into the household could make a huge difference.

2. Are you being paid what you are worth? Australia is suffering a major jobs crisis so don’t be frightened to ask for a raise in salary or change jobs if you believe you are underpaid.

3. If credit card debts and personal loans are the problem, think about consolidating then with the home loan. Beware, this will only work if you stay away from future consumer debt and raise the repayments on the increased home loan balance so the overall term is shortened not lengthened.

4. Can you take in a boarder to help with rates insurance and electricity? If you do, be careful that the money they give you is treated as a contribution to household expenses and is not actual rent – otherwise you could find yourself losing part of your capital gains tax exemption as you are carrying on a business in part of your residence.

5. If you are 55 or over, boost household income by accessing part of your superannuation as a transition to retirement pension.

6. Don't ignore the problem – it isn't going to go away. Also, don’t be afraid to ask for help. If you are having trouble managing school fees, talk to the principal, as many schools have schemes to assist families in these circumstances. If things get really tough, don't be too proud to ask for emergency food and clothing from organisations like Lifeline. They have counselling services which can help ease the emotional strain as well.

Finally, an ounce of prevention is worth a ton of cure, so take the time to prepare a detailed budget before you sign a contract to buy a home and base your repayments on eight dollars a thousand a month at least. This will give you a cushion if interest rates rise and will slash the term of the loan if they fall.

Sunshine Coast Daily April 2nd 2008