If you’re like millions of Australians, you’re probably relieved after getting a break from the Reserve Bank of Australia (RBA) following consistent interest rate hikes since April 2022.
The good news? Most banks have agreed to pass on the 0.25% rate reduction, benefiting both existing home loan customers and new borrowers who took out a loan between 28 February and 14 March.
But what does this rate cut actually mean for your monthly mortgage repayments? Let’s break it down.
How Much Will Your Mortgage Repayments Decrease?
The 0.25% reduction can lead to noticeable savings, depending on your loan amount:
- $500,000 mortgage – Expect a monthly reduction of $80.84
- $1,000,000 mortgage – Monthly repayments decrease by $161.66
- $2,000,000 mortgage – Savings of $323.33 per month
Your exact savings may vary based on how far along you are in your loan term.
How to save $17,000 on your mortgage – It’s time to talk to your lender!
Will Your Bank Automatically Adjust Your Repayments?
Not all banks will automatically lower your monthly repayments. In some cases, it’s up to you to request the adjustment.
However, keeping your repayments at the higher rate could work in your favor. By continuing to pay more, you’ll reduce your loan term by one month to three years, depending on future market conditions—potentially saving tens of thousands of dollars in interest over time.
Need More Breathing Room? Contact Your Bank
If you’d rather free up extra cash each month, you’ll need to contact your bank or mortgage broker to manually adjust your repayments to the new minimum amount.
Is Your Interest Rate Still Too High?
Now is a great time to review your home loan rate. If your mortgage doesn’t have a five in front of it, it might be time to contact the team here at Chan & Naylor Finance for an obligation-free check in.
Aaron Hickey
Mortgage Broker
5/55 Grandview St, Pymble NSW 2073 Australia
P: 1300 306 868
M: [0429 597 371]
E: aaronh@chan-naylor.com.au
Aaron Hickey is a credit representative number 495791 of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237)
About Chan & Naylor
Established in 1990, Chan & Naylor has been a trusted partner for thousands of businesses and investors across Australia. Based in Sydney, we provide expert accounting services tailored to your needs. Choosing Chan & Naylor means you’re not just selecting a service provider; you’re gaining a partner aligned with your business goals. You’ll have access to a dedicated client manager supported by a team of accountants that specialises in business tax and investments. Contact us today so we can discuss how we can help you.
Disclaimer
This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investments.
