Aussies 'are paying off their mortgages faster'

Aussies are using the recent interest rate cuts sanctioned by the Reserve Bank of Australia (RBA) to pay their mortgages off faster.

This is the view of Commonwealth Bank chief executive Ian Narev, who said that people are not reducing their monthly instalments, but are instead shortening the term of their loan, the Australian Associated Press reports.

The RBA trimmed the national cash rate by 25 points at the start of the month, taking it down to a three-year low of 3.25 per cent.

House hunters had already been helped along by a series of reductions starting in November 2011, as the central bank tried to encourage more activity in the property sector.

Mr Narev added that many people are still worried about the state of the economy around the world and this has forced Aussies to adopt a more cautious approach to their finances.

"We continue to see high degrees of global uncertainty and they continue to translate in Australia to lower credit growth, higher savings rates, more nervousness regarding investments," he remarked.

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