The RBA may have swiped left on an April rate cut, but plenty of home owners are taking matters into their own hands by refinancing to save on interest with a lower rate.

There’s nothing like a rate cut to put a spring in home owners’ steps.

February’s 0.25% rate cut , for instance, saw consumer sentiment jump to a three-year high.

But with the Reserve Bank of Australia (RBA) keeping rates on hold in April, and no chance of another cash rate cut until 20 May, many home owners are taking a do-it-yourself approach and cutting their home loan rate by switching to a new loan or lender.

A Canstar survey  found more than one in two (55%) variable rate borrowers are considering refinancing, while one in seven (14%) have already made the move over the last 12 months.

The potential to pay a rate starting with a ‘5’

When did you last review your home loan?

According to Finder, variable and fixed mortgage rates have dropped to their lowest levels since early 2023 , and loans with rates below 6% are “flooding the market”.

More than 30 lenders are offering at least one variable rate under 5.75%, according to Canstar.

Despite this, the average owner-occupier variable rate is still sitting at about 6.44% ( Mozo stats ).

That suggests to us that there are plenty of borrowers who could be paying more interest than necessary each month.

Fixed rates are also heading south

It’s not just variable rates that are falling.

Mozo reports a whopping 39 lenders cut some or all  their fixed options in March.

And you don’t have to lock in for a long period; a number of one-year fixed rates are also competitive at present.

Question is, how much can you really save by refinancing?

The potential to save over $12,000 in just 2 years

Canstar crunched the numbers  and found that a complacent borrower who hasn’t refinanced in a while could be on a variable interest rate of about 6.86% at present.

However, let’s say that same borrower refinanced a $600,000 loan down to an interest rate of 5.74% – that could potentially save them more than $12,000 in interest over the next two years.

Even if your current rate is at 6.06%, Canstar says refinancing to 5.74% could still see you save almost $3,000 in interest over the next two years.

Of course, exactly how much you could save by refinancing depends on the rate you’re currently paying.

That makes it worth giving us a call – we can put you in the know with figures tailored to your situation.

Why wait for an official rate cut?

We could all do with lower home loan repayments.

And with no guarantees that the RBA will cut rates further any time soon, it might be worth taking a look to see if you could save by switching.

Remember too, that refinancing isn’t just about trying to pay a lower interest rate.

It can also be an opportunity to tap into new loan features, or access home equity to achieve personal goals such as buying an investment property or renovating your home.

So if you haven’t refinanced in a while, give us a call today and we’ll walk you through your options.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

‘Close to public transport’ is often touted as a plus for home buyers. But new research shows just how much close proximity to a busy road, railway or flight path can impact property values.

Location, location, location.

When you’re hunting for a new home, most people are on the lookout for an abode that’s close to public transport and other convenient transport infrastructure.

But how close is too close? And can an increase in transport noise result in a decrease in property value?

New research by PropTrack and Ambient Maps  suggests so.

How much can traffic noise impact property prices?

The study analysed noise pollution across Victoria from busy roads, railways and air traffic. Then it measured those findings against nearby property sale prices over a five-month period.

Here’s how the findings stacked up for every 10 decibel (dBA) increase in noise:

Roads:  an average decrease in property value of 6% was seen for every 10 dBA increase in road noise.

Rail:  an average decrease of 4% was seen for every 10 dBA increase in rail noise (even after accounting for the benefits of the convenience of living near a train line).

Aircraft:  an average decrease of 6-9% for every 10 dBA increase in aircraft noise. Given that properties outside the flight path can experience noise levels that are 20 dBA less than those within the flight path, the difference in property value may be significant.

By way of example, a 5% decrease on a $1 million property is about $50,000.

What does a difference of 10 dBA sound like?

Included in the study  on page 8 is a neat little graphic that illustrates the differences between a 45 dBA home, all the way up to a 75 dBA home.

We’ll do our best to describe it to you below if you can’t click the link above:

45 dBA home:  Located in a quiet cul-de-sac with no through traffic and no public transport nearby.

55 dBA home:  A home in a two-way suburban street with minimal traffic passing by.

65 dBA home:  Located on a main road with four lanes of traffic and public transport such as a bus or tram regularly passing by.

75 dBA home:  Located on a six-lane arterial road, with trucks, buses and plenty of cars travelling along it.

The silver lining of it all

Sure, owning a property close to a busy road, train station or flight path could impact your home’s long-term investment value.

But it can also allow you to break into the property market in a home that’s a great fit for your family sooner.

There are also lots of ways you may be able to help soundproof your home, such as double glazing, sealing gaps, solid core doors, soundproof curtains, insulation and even soundproof panelling.

The main thing to be aware of when you’re buying a home: don’t let the “location, location, location” sales pitch twist your arm into overpaying – especially if noise becomes a factor.

So if you’re currently in the market to buy, get in touch with us today and we’ll assess your borrowing power to help give you a better idea of what you can afford.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

This Easter offers more than chocolate eggs and hot cross buns. It brings a rare mega-holiday, and if your budget doesn’t stretch to a trip away, check out our tips to enjoy a memorable getaway – at home.

Fun fact: 2025 sees the Easter public holidays fall in the same week as Anzac Day.

That means that from Good Friday on 18 April through to the Anzac Day weekend starting Friday 25, you could score a 10-day break and only use three days of annual leave.

This meshing of Easter and Anzac Day has only happened 17 times in the last century  and just five times this millennium.

Why waste the opportunity? Time to start booking leave.

Don’t have the cash for an expensive holiday? No problem.

If your budget is tight, or pet obligations keep you at home, check out our top tips for an exciting staycation at home.

1. Prepare your home in advance

Prepare your home as if a special guest was arriving, only the special guest is you!

Give the place a thorough clean, stock the bathroom with clean towels, have fresh sheets on the bed.

Tuck away anything that will break the holiday spell – from the lawn mower to paperwork for bills.

Sure, it’s not the “fun” part of the holiday.

But it will make the next 10 days feel a little less cluttered and give you more space to stretch out, kick back and relax.

2. Stock the fridge or whip up a feast

Great food is always part of a great holiday. And a staycation is no exception.

Indulge yourself by stocking the fridge with the food and drinks you would normally reserve for special occasions – artisan cheeses, special cuts from the butcher or that $10 sourdough you’ve always wanted to try.

Alternatively, dust off the kitchen apron and try your hand at a dish or two you’ve always wanted to cook, but never had the time to do so.

One cheap and easy win is breakfast crepes  – they only cost a few dollars to make and the whole family can have fun trying to flip them.

3. Explore (and support) your local neighbourhood

Chances are your local area has plenty of hidden gems you’ve never had time to try out.

Here’s your chance to explore them.

Check out that new café, head off on a bike ride you haven’t experienced before, or take the yoga class you’ve never got around to.

The main point is to leave the normal routine behind. Unwind and let yourself meander around locally at your own leisurely pace.

4. Go backyard camping

Who needs an expensive caravan?

There’s something about camping that kids love – from pitching tents to cosying up in a sleeping bag.

Use your staycation to set up a family backyard sleep out – complete with a contained mini firepit (that you can buy from Bunnings) to roast some marshmallows while teaching the kids about the star constellations.

If your home is an apartment, create an awesome indoor camp-out by gathering up sheets and pillows to build a snug blanket fort.

Turn off the lights, flick on the torches, and bring the outdoors inside with picnic dinner on a blanket on the floor.

5. Be a tourist in your own city

Ever noticed that overseas tourists often experience all the sights that locals don’t have time to?

A staycation is a great opportunity to tick through the tourist bucket list and see what overseas visitors rave about.

Head to museums, galleries and cathedrals (many offer free or low-cost entry) and soak in whatever your state capital has to offer.

A quick Google search of “What’s on in [your neighbourhood]” should also give you plenty more inspiration.

Don’t forget to grab a souvenir – maybe a fridge magnet or mug, as a memento of the special time you got to know your city a little better.

Relish everything your home has to offer

In the day-to-day rush of our lives, it can be easy to overlook that our home is our personal sanctuary. A place to enjoy downtime, relax and unwind.

Make the most of your home through the upcoming mega-holiday, and you could make amazing memories while not forking out the type of money you’d have to for a trip away from home.

Talk to us today for more ideas on making the most of your home – and home loan.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

It’s been a long, hot summer, but the seasons are shifting and it’s time to prepare for the cooler months ahead. A few simple improvements could help keep your home snug without overheating your power bills.

It’s almost time to pack away the boardies, swap sarongs for sweaters and cross from cricket to footy.

As we prepare for the cold to creep in, it may also be time to show your home some love.

A few budget-friendly improvements can make your home a haven of winter warmth, with the added plus of keeping heating bills down.

Here are three low cost renovation ideas to get you started.

1. Keep the cold out and the warm in

Fun fact: as much as 25% of winter heat loss  can come from draughts (officially known as ‘air leakage’).

A simple but effective home renovation project is to find and fix gaps that are letting in cold air.

Energy Australia suggests  installing door seals, and using a waterproof filler called ‘caulking’ to seal windows and around skirting boards.

2. Rethink home heating

Once your home is draught-proofed, it’s time to rethink home heating.

This can make a big difference to your hip pocket, because heating (and cooling) are the biggest energy guzzlers in Aussie homes , accounting for a whopping 40% of energy use.

So, if you’re planning to wheel out the trusty electric bar heater that has served you well for many years, it could be time to think again.

It turns out that reverse cycle air-conditioners are the most energy-efficient heater (and cooler)  of all types, irrespective of fuel source.

Even an air con unit with a low efficiency rating (for example, 2 to 3 energy stars) can be significantly cheaper to run than other heating appliances.

3. Insulate

Wearing layers of clothing keeps us warm in winter. Yet we often leave our homes to shiver through the cold.

Adding insulation is the equivalent of wrapping your home in a warm woolly onesie. Except that it also helps your place stay cool in summer. What’s not to love?

Consumer group CHOICE says  as much as one-third of an uninsulated home’s warmth is lost through the roof. So, if your budget is tight, insulating your roof cavity is a great first step.

If your budget extends further, or if you are building a new home, installing floor, wall and ceiling insulation can save hundreds of dollars on energy costs each year.

How to help manage the cost

Of course, it’s not too difficult to plan for small home improvements that can make your home more comfy in winter.

However, the reality may be that you need to foot the bill for a reno that’s a bit more substantial.

The good news is that your current home loan may provide a potential source of finance.

Or, we can explain other options such as a construction loan or renovation loan for bigger projects.

The main point is to talk to us today, and start taking steps to make your place warm and cosy this winter.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The so-called market ‘downturn’ we saw over the last few months was a blink-and-you-miss-it affair. Home prices are once again on the up. We unpack what’s happening – and why now could be a good time to buy.

Jeepers. That didn’t last long.

Back in early January, CoreLogic declared Australia’s housing market had entered ​a downturn  after property prices dropped -0.01% in November and -0.1% in December (followed by a -0.03% dip in January).

Fast forward to early March – just two months later – and CoreLogic reports “ Housing downturn reverses in February ”.

Have we just witnessed the shortest downturn on record? Or was it just a minor blip on the radar?

Here’s a closer look at what’s happening with home prices.

Lower rates have fuelled buyer confidence

When CoreLogic stated in January that “ the growth phase of the (property) cycle has come to an end ”, it had plenty of evidence to back up the claim.

Homes were taking longer to sell. Listings were up across the country, and buyer demand was stalling.

Events in February changed all this.

Expectations of a Reserve Bank of Australia (RBA) rate cut grew stronger, boosting buyer confidence.

Auction clearance rates improved , and the flow of freshly advertised ‘for sale’ listings slowed.

The much-anticipated 0.25% RBA rate cut , when it finally arrived, brought everything together to see home prices rise 0.3% in February, reversing the falls of the previous three months.

Will home prices keep rising?

According to REA Group , February’s rate cut not only lifted buyer sentiment, it also delivered an uptick in borrowing power and improved affordability.

And after a long period of higher rates, REA says buyers who held off purchasing are now re-entering the market.

Could this see home values continue to rise?

A lot hinges on interest rates.

The RBA has made it clear it’s in no great hurry to call further rate cuts , though that doesn’t mean it won’t happen.

NAB is predicting four more rate cuts  over the next 12 months.

Westpac says rates could drop an additional 0.75% this year , and expects home prices to increase by 3% in 2025 , and by 7% next year.

AMP says Australia’s “chronic shortage of homes” could see home prices jump 3% this year.

Why now could be a good time to buy

FOMO (fear of missing out) should never be the main motivator for buying a home. After all, it’s probably the biggest investment you’ll ever make.

But as the last few months have shown, market downturns can be done and dusted in a matter of weeks, and sitting on the sidelines waiting for prices to fall can just mean paying more down the track.

Call us to know if you’re home loan ready right now, and we’ll get the ball rolling on a loan that matches your needs and budget.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Good news for the three million Australians who have a student debt. New rules are on the cards that could soon increase their borrowing power when applying for a home loan.

Heading off to uni can be a great investment in your skills and qualifications, potentially leading to a higher income over the course of your career.

The downside for many, though, is a lingering student debt.

More than just a balance to be repaid, a HECS/HELP debt can impact your ability to buy a home.

So, it’s great to hear that the federal government is pushing for lending rules to be loosened so that graduates have a better chance of getting started as home owners.

How a HECS/HELP debt can impact home-buying plans

Around 3 million Australians  have an outstanding HECS/HELP balance.

HECS/HELP debts work differently from other types of debt – the balance doesn’t attract interest but it is indexed (typically upwards) each year in line with (the lower of) inflation or wages growth.

And unlike traditional debts, HECS/HELP repayments only kick in when graduates earn over $54,435 a year (2024-25 threshold), with a starting repayment rate of just 1% annually.

Sounds good, right? Well, here’s the thing.

University fees went up in recent years. And so did the indexation rate. Both of which have pushed up the average HECS/HELP debt.

This is hurting the borrowing power of many young university graduates who are trying to enter a property market that has also boomed in recent years.

That’s because under responsible lending rules, banks currently take a home buyer’s HECS/HELP debt into account – in much the same way as an outstanding credit card balance or car loan – when deciding how much they’ll lend.

Fortunately, that looks set to change.

New calls to loosen lending rules for HECS holders

Federal Treasurer Jim Chalmers recently called on financial regulator Australian Prudential Regulation Authority (APRA) to update its guidance to banks to make it easier for people with a HECS/HELP debt  to take out a home loan by removing HECS/HELP debts from debt-to-income reporting.

Chalmers believes this would be a “commonsense” change, saying, “people with a HECS/HELP debt should be treated fairly when they want to buy a house and we’re working with the regulators to make sure they are.”

Meanwhile, the Australian Banking Association has said the potential to unlock more credit for prospective home buyers  could assist them in realising the dream of home ownership.

Long story short, the government and bank regulators, including both APRA  and ASIC ,  appear to be in agreement on making these changes promptly.

Of course, we’ll keep you in the loop with any updates, as changes could mean a generous uptick in your home loan borrowing power.

What it could mean for you

Having a HECS/HELP debt, or any other student debt, shouldn’t discourage you from exploring your home loan options if you’re keen to buy.

Get in touch to find out your borrowing power and discover if you’re home loan-ready today.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Finally, a long-awaited reprieve for borrowers. The Reserve Bank of Australia has today cut the cash rate by 25 basis points to 4.10%. How much could this rate cut decrease your monthly mortgage repayments? And can we expect more cuts this year?

This is the first time the Reserve Bank of Australia (RBA) has cut the cash rate since it slashed rates to 0.10% in November 2020 in response to the COVID-19 outbreak.

Since then, we’ve had 13 cash rate hikes as the RBA attempted to rein in inflation.

RBA Governor Michele Bullock said in a statement that inflationary pressures are now easing a little more quickly than expected after recent data showed December quarter underlying inflation was 3.2 per cent.

“There has also been continued subdued growth in private demand and wage pressures have eased,” Governor Bullock said.

“These factors give the Board more confidence that inflation is moving sustainably towards the midpoint of the 2–3 per cent target range.”

How much might your mortgage repayments now decrease?

Unless you’re on a fixed-rate mortgage, hopefully your bank will soon follow the RBA’s lead and decrease the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate cut means your monthly repayments could decrease by about $77 a month. That would put $924 a year back into your household budget.

If you have a $750,000 loan, your monthly repayments will likely decrease by about $115 a month – or $1380 per year.

Meanwhile, a $1 million loan could decrease by about $154 a month – or $1848 a year.

This all assumes that your lender automatically passes on the full 25-basis point cut to your home loan.

After so many years of rate hikes and higher interest rates one would hope they would, and there will be public and government pressure for lenders to do so (especially with a federal election around the corner).

Another thing to consider is that not all lenders automatically reduce variable home loan monthly repayment amounts in line with rate cuts.

Some lenders simply maintain your repayment amount at the old level. It’s just that more of your money goes towards paying off the principal (rather than the interest) each month. But you can ask them to reduce your repayments in line with their cuts.

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled.

How low are interest rates expected to go in 2025?

There are still seven more RBA meetings this year, during which the board may cut the cash rate further. But the RBA remained tight-lipped on whether more cuts will follow in their most recent statement.

Here are what economists at the big 4 banks are predicting.

– NAB:  cash rate falling to 3.10% by February 2026 (four more cuts)
– CBA:  cash rate falling to 3.35% by December 2025 (three more cuts)
– Westpac:  cash rate falling to 3.35% by December 2025 (three more cuts)
– ANZ:  cash rate falling to 3.85% by August 2025 (one more cut)

Are you worried about your mortgage? Get in touch

Despite this latest cut, there are still plenty of Australian households feeling the pinch of cost of living pressures and high interest rates.

If you fall into that category and haven’t had a home loan health check in a while, get in touch to see if you could be doing better on your home loan.

Some options we can help you explore include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is different – and we’d be more than happy to help you come up with a tailored plan for yours.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

If you’re in the market for a first home, there’s one scheme you should know about. It’s called the Home Guarantee Scheme, and it could slash the time it takes to buy a place of your own by several years. Here’s how it works.

Saving that all-important 20% deposit for a first home isn’t easy – especially given the current cost of living crunch.

In fact, the average time taken to pull together a first home deposit has now hit 10.6 years, according to CoreLogic.

But with the Home Guarantee Scheme (HGS), you may be able to buy with just a 5% deposit – without paying lenders mortgage insurance.

No wonder 193,000 first home buyers  have used the HGS to get into the market since it launched in 2020.

How the Home Guarantee Scheme works

Instead of giving first home buyers a cash payment, which is (essentially) the case with the First Home Owner Grant , the HGS sees the federal government guarantee your home loan.

This can benefit first-home buyers in two ways.

First, under the HGS, lenders can let you take out a home loan with just a 5% deposit. Of course, some banks already offer this.

But if you have a deposit below 20%, you’ll usually be asked to pay lenders mortgage insurance (LMI), and that can cost many thousands of dollars.

That’s where the second upside of the HGS comes in.

Buyers using the scheme aren’t slugged with LMI, as the government acts as guarantor for your mortgage instead.

Three HGS options

The HGS is pitched at three types of buyers:

1. First Home Guarantee

The First Home Guarantee  aims to help eligible first home buyers get a place of their own sooner.

In the current financial year, a total of 35,000 places are available.

2. Regional First Home Buyer Guarantee

If you’re planning to buy a first home in a regional area, the Regional First Home Buyer Guarantee  could match your needs.

Only 10,000 places are up for grabs in the scheme this financial year, so reach out sooner rather than later if you’d like to explore this option.

3. The Family Home Guarantee

If you’re a single parent, the Family Home Guarantee  is even more generous.

It allows eligible applicants (you don’t have to be a first home buyer) to purchase a home with as little as a 2% deposit without paying LMI.

The catch is that only 5,000 places have been made available for the 2024-25 financial year.

Why more first-home buyers are using the 5% deposit scheme

Just five years ago, around one in 10 first home buyers  turned to the HGS for help buying a first home.

Today that figure is closer to one in three.

And it’s not just about rising property prices, higher interest rates or cost of living pressures.

The First Home Guarantee and the Regional First Home Buyer Guarantee have been expanded to include friends, siblings and other family members buying together, along with non-first-home buyers who haven’t owned a property in Australia in the past 10 years.

The fine print

The 5% first home buyer deposit scheme does have a few strings attached.

You will need to meet eligibility conditions.

These chiefly relate to your income  and the maximum price you plan to pay for your first home – property price caps also apply.

The other thing to be aware of is that not all lenders have signed up to the HGS, so your options can be a little more limited.

Talk to us to get the ball rolling

If you’re interested in fast-tracking your path to home ownership, the 5% deposit HGS could be the solution you’ve been looking for.

Talk to us to find out if you’re eligible for the Home Guarantee Scheme – and discover the lenders that can help you get across the line.

Disclaimer:  The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Great news for home owners – plenty of economists are tipping an RBA rate cut for February. Assuming it happens, once the celebrations have died down, what next? We explain what to expect when rates head south.

It’s been a long time between drinks for home owners celebrating a rate cut.

The last time the Reserve Bank of Australia (RBA) gave rates a chop was back in 2020.

But the tide may be about to turn.

A growing chorus of economists – plus banks including NAB  and Westpac  – are expecting a rate cut of 0.25% when the RBA board next meets on February 17-18.

Of course, nothing is set in stone.

If we do see rates head lower though, it’s worth knowing how your home loan and repayments could be impacted.

What will happen to my loan rate?

If you have a fixed-rate home loan, it’s business as usual no matter what happens to the cash rate.

Your fixed rate won’t change and neither will your required monthly repayments.

That said, if you’re coming to the end of a fixed term, it’s worth having a chat with us about your next moves once the fixed rate expires.

The real action occurs if you have a variable rate home loan.

If the RBA cuts the cash rate, your variable home loan rate should fall too.

By how much? Well, banks don’t have to follow the cash rate. And history has shown  that lenders haven’t always passed on rate cuts in full.

But banks may want to avoid potential backlash, especially given the current cost-of-living climate.

That would hopefully see most lenders pass on 100% of any rate cut. So, if the RBA cuts rates by 0.25%, your home loan rate should hopefully drop by 0.25% also.

How do you find out the new rate? Your lender will get in touch to let you know.

Will my repayments change if rates fall?

Not necessarily.

Some lenders automatically reduce home loan repayments in line with rate cuts.

Other banks, however, simply maintain your repayments at the old level. It’s just that more of your money goes towards paying off the principal (rather than the interest) each month.

This can be frustrating if you’re hankering for some extra money for your family budget each month.

However, some banks take the view that by maintaining your old repayments, they’re helping you pay more off the loan and get ahead with your mortgage.

To find out if your bank is automatically dropping your monthly repayments, or if you need to request for it to happen instead, get in touch with us and we can let you know.

How much might your mortgage repayments decrease?

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, a 25 basis point rate cut means your monthly repayments could decrease by about $77 a month.

That would put $924 a year back into your family budget.

If you have a $750,000 loan, your monthly repayments would likely decrease by about $115 a month – or $1380 per year.

Meanwhile, a $1 million loan would decrease by about $154 a month – or $1848 a year.

Worried about your mortgage? Get in touch

Despite a potential rate cut on the horizon, there are still plenty of households around the country feeling the pinch of cost of living pressures and high interest rates.

If you fall into that category and haven’t had a home loan health check in a while, get in touch to see if you could be doing better on your home loan.

Some options we can help you explore include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is different – we’d be more than happy to help you come up with a tailored plan for yours.

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