As the Reserve Bank of Australia (RBA) contemplates another interest rate cut tomorrow, new data has revealed very few Australians have used previous cuts to access extra cash.
Commonwealth Bank Home Buying Executive General Manager Michael Baumann said less than 15 percent of eligible home loan customers reduced their home loan direct debit repayments following the February 2025 rate cut.
“Following February’s rate cut, around 14 per cent of eligible customers took this opportunity to reduce their direct debit to align with the lower repayment – thereby freeing up their current cash flow,” Dr Baumann said.
He said the 0.25 percent per annum rate reduction delivered monthly savings of up to $80 for customers making principal and interest repayments on an average loan size of $500,000.
“For those who did not reduce their direct debit repayments, they may now be making additional repayments on their mortgage, which could help them to pay off their loan faster.”
Dr Baumann said with the next RBA cash rate decision due on May 20 he expected the proportion of customers using any additional rate cuts to free up their cash flow to increase.
“If rates fall further, it could deliver greater total savings to eligible home loan customers. As such, I wouldn’t be surprised to see more home loan customers choosing to free up their cash flow by lowering their regular mortgage repayments,” he said.
