It’s been a week since the RBA decided to cut official interest rates, but we’ve already seen more than 20 lenders pass on the full 0.25% cut to their variable home loan customers.
With so many lenders making cuts, and several now offering rates well below the 3.50% mark, you might be looking at your home loan and wondering how to best take advantage of the situation.
If your lender passed the rate cut on to you, one way to make the most of it, says Mozo’s banking expert, Peter Marshall, is to keep up with pre-cut level repayments.
“By continuing to make the same repayments as before the rate cut you may not be paying much above the minimum repayment level each month, but over the life of the loan it can really add up,” he said.
“For example, paying an extra $50 per month on a loan of $500,000 with an interest rate of 3.50% would save around $8,600 in interest payments over the life of the loan."
If, however, your bank has decided to hold onto some of the RBA rate cut for itself, or only offered new low rates to new borrowers, refinancing your home loan might be in order. Thankfully, there’s no shortage of attractive options on the market right now. Below we’ve compiled some seriously hot rates everyone with a mortgage should have on their radar.