The RBA is expected to keep the cash rate on hold at 3.60 per cent this week, after cutting rates in February, May and August. (Source: AAP/Getty)
Australia’s biggest bank, Commonwealth Bank, has revealed just one in 10 home loan customers lowered their repayments after the Reserve Bank of Australia (RBA) cut interest rates in August. Despite cost-of-living pressures, borrowers haven’t been rushing to bank the relief and instead are trying to get ahead of their repayments.
The RBA is widely expected to hold the cash rate at 3.60 per cent at its September meeting this week. Commonwealth Bank, Westpac and ANZ expect the next cut won’t come until November, while NAB has pushed back cuts to May 2026.
Cameron Capital founder Mary Cameron told Yahoo Finance keeping your repayment the same after rate cuts could be a “smart” way to bring your home loan down and pay it off quicker.
“You’re smashing down the loan a lot sooner, just keeping the repayments the same without reducing your repayments to the new, smaller amount,” Cameron said.
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Commonwealth Bank data found that just 11 per cent of eligible home loan customers reduced their direct debt repayments after the August cut, which is slightly above the number seen after the February and May cuts.
First-home buyers were less likely to make changes, with around 8 per cent reducing repayments.
Customers aged 31 to 40 were the most likely to change repayments, with 14 per cent opting to make reductions.
That’s compared to 11 per cent of customers aged 21 to 30, and 9 per cent of those aged 51 to 60, reflecting different life stages.
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Executive general manager home buying Marcos Meneguzzi said this was a consistent trend, with most customers keeping their repayments unchanged across the three rate cuts.
“Following each rate cut this year, the percentage of customers reducing their direct debit repayments has been almost identical at the same point in time. That is even as the potential savings from reducing repayments have increased,” he said.
Across the three cuts, the combined monthly savings for customers making principal and interest repayments on an average loan size of $500,000 is $240.
CommBank’s 2025 Financial Year results found 85 per cent of home loan customers were ahead on their repayments, with an average buffer of 32 monthly payments.
Westpac is the only one of the Big Four banks that automatically drops repayments for customers paying the minimum amount. CBA, NAB and ANZ customers have to contact their bank if they want their direct debts lowered.
After the May cut, NAB and ANZ revealed just 10 per cent and 11 per cent of eligible borrowers adjusted their repayments, respectively.
Meneguzzi noted customers who opt to keep their repayments the same can later reduce their repayments at any time via the app or internet banking.
You can potentially save thousands of dollars in interest and shave years off your home loan by keeping your monthly repayments the same.
Canstar crunched the numbers for a borrower with a $600,000 mortgage and 25 years remaining at the start of the rate cuts.
If they kept their repayments the same after each of the three cash rate cuts and kept repaying this amount for the rest of their loan, they could potentially save $76,536 in interest and pay off their mortgage three years and three months early.
Someone with a $1 million loan could potentially save $127,560 in interest over the life of their loan by keeping repayments the same, and also shave three years and three months off their mortgage.
Cameron said changing your repayments from monthly to fortnightly or weekly could be another way to save and pay off your loan quicker.
Adding any lump sum bonus money you receive to your mortgage, like a tax refund, or rounding up your repayments, are other strategies you can consider.
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