How home owners are cutting years off their mortgage with zero admin
They would also save tens of thousands of dollars in interest over the term of their loan, ranging from $48,711 on a $500,000 mortgage to $97,422 on a $1 million loan, comparison platform Canstar found.
The Reserve Bank went against expectations on Tuesday by holding official interest rates steady at 3.85 per cent, leaving homeowners disappointed.
While the move surprised economists who had largely been expecting a cut, many tip further relief at the bank's August meeting once more inflation data is available.
Despite Tuesday's decision, home owners can use the two cuts so far this year to get ahead on their loan.
Many Australians may already be inadvertently paying over the minimum without realising, said Canstar's data insights director Sally Tindall, as not all banks automatically lower minimum repayments after a rate cut.
'Three of the big four banks – CBA, NAB and ANZ – don't automatically lower variable rate customers' direct debits after a cut, even if they're paying the minimum,' she said, adding that customers with these banks have to ask their lender to lower them.
Westpac is the only big four bank that automatically reduces repayments to the new monthly minimum unless a customer has opted to pay extra.
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- News.com.au
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Sydney Morning Herald
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