Surprise Move: Aussie Home Owners Hold Steady on Repayments as Rates Ease

After two rate cuts in early 2025, many Australian homeowners are choosing to stick with their current mortgage repayments. It’s a quiet but clever move that could lead to major interest savings over the long run.

There’s no denying it. Compared to last year, 2025 is looking much brighter for borrowers.

With two interest rate cuts already locked in and more predicted by some analysts, the pressure on household budgets may finally be easing.

But here’s the unexpected twist.

Rather than rushing to reduce their monthly repayments and pocket the short-term relief, most borrowers with one major lender are continuing to pay the same amount they were before the rate cuts. This simple decision could make a big difference over time.

A Potential $160 Per Month in Savings

Recent RBA rate cuts have opened the door to lower monthly repayments for many Australians.

Take the average $500,000 home loan. February’s 0.25% rate cut could have lowered monthly repayments by around $80. The second cut in May added another $80 to the potential savings.

That’s a combined monthly reduction of up to $160, or close to $2,000 a year.

Despite that, it seems the majority of borrowers haven’t contacted their lender to adjust their minimum repayment amount.

Why Aren’t Repayments Dropping?

Data from the Commonwealth Bank, which holds roughly one in four Australian home loans, shows that just 14% of variable rate borrowers reduced their loan repayments after February’s rate cut. That means 86% chose to leave their repayments as they were.

It’s not as odd as it sounds.

Most lenders, including Commonwealth Bank, don’t automatically reduce your minimum repayment when interest rates are lowered. Instead, they often keep it fixed at the same level unless you request a change.

By keeping your repayment steady while interest rates fall, more of each payment goes toward the loan principal rather than interest. Over time, this can shorten your loan term and cut thousands off the total interest bill.

Some lenders may automatically adjust repayments, so it’s worth confirming what your lender has done. If you’re unsure, now is a good time to check.

The Payoff of Sticking with Higher Repayments

If you can manage the same monthly repayment even after rates have dropped, you could be setting yourself up for big long-term savings.

Here’s what the numbers look like.

With a $500,000 mortgage at an average variable rate of 6.42% and a 25-year term, maintaining your previous repayment amount (which is effectively $160 more per month) could shave over $61,000 off your total interest bill.

Even better, you could own your home 2.5 years sooner than originally planned.

And if rates fall further in the months ahead, your interest savings could increase even more.

Find Out What You Could Save with Osinski Finance

Sticking with your current repayment amount can be a smart way to reduce interest and pay off your home loan sooner, but it all depends on your rate, loan balance, and financial goals.

From securing the right home loan to planning your next investment or refinancing your current mortgage, Osinski Finance helps you make smart, practical decisions every step of the way.

We’ll crunch the numbers, explain your options clearly, and show you how strategies like holding your repayments steady could save you thousands in interest.

Talk to us today for expert guidance to build your property portfolio.

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.