Home loan repayments 'should be kept steady after rate cut'

Tuesday 15 November 2011

Article by Mozo

Aussies have been advised not to adjust their home loans repayments following the recent reduction in the cash rate announced at the start of the month by the Reserve Bank of Australia.

Home loan repayments 'should not be cut after cash rate reduction'

Mortgage Choice's mortgage management tips for the festive period suggested paying the same amount back as before the rate change in order to reduce the time it takes to pay off the loan.

It observed that on a seven per cent loan of $300,000 over 30 years, maintaining payments could mean the loan is paid back two-and-a-half years early.

The company calculated that the amount of money saved in interest repayments would be $54,000.

Kristy Sheppard, company spokesperson, commented: "Staying on top of financial obligations, in conjunction with careful pre and post silly season budgeting and planning, will without a doubt put you in a better position to achieve your property goals sooner."

This comes after the same expert asserted that fixed-rate home loans are increasingly popular as Aussies look to lock-in the attractive interest rates.

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