Invest
The borrowers saving $21k after this month's cash rate cut
Property investors and borrowers are the big winners from the Reserve Bank of Australia’s announcement slashing the official cash rate to 1.25 per cent.
The borrowers saving $21k after this month's cash rate cut
Property investors and borrowers are the big winners from the Reserve Bank of Australia’s announcement slashing the official cash rate to 1.25 per cent.
According to the Australian Bureau of Statistics, the average home loan size in Australia is 384,700, while the average variable loan is 4.91 per cent.
For customers of lenders who have passed on the full rate cut, their interest rate would be 4.66 per cent, meaning $21,000 in savings over the life of the loan.
If Australians kept paying their mortgages at the previous rate, they could take nearly two years (22 months to be exact) off their loan, meaning they would not only be out of debt sooner but would save $43,000.
Graham Cooke, insights manager at Finder, believes this is a unique point in Australia's history.
“This is uncharted territory for us and if two more rate cuts are enforced this year, we could potentially see a rate of 0.75 per cent, which is unheard of in Australia.
“It’s almost hard to fathom what it was like for borrowers 11 years ago with a 7 per cent cash rate, let alone the 17 per cent cash rate back in 1990,” said Mr Cooke.
Will home owners just spend more?
Should historical market behaviour continue, Finder believes the average home loan size will increase following this cut as it has for eight of the last 10 rate cuts.
“The average home loan size increase following the last 10 rate cuts was 1.3 per cent. This could add almost $5,000 to the average size of home loans nationally,” said Mr Cooke.
“With interest rates dropping, and loans becoming both cheaper and easier to attain, this could very well be the turning point for the slumping housing market,” said Mr Cooke.
“However, these previous cuts occurred in environments where house prices were increasing, so we’ll have to wait and see how the market responds this time,” continued Mr Cooke.
RELATED ARTICLES
About the author
About the author
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Victoria’s $100m renter support push: what it means for landlords, proptech and the housing economy
Victoria has unveiled a new suite of rental support services, including a dedicated helpline for renters aged 55+, underpinned by a funding package widely reported at around $100 millionRead more
Property
The multigenerational home moves mainstream: where the next margin lives in Australian real estate
Multigenerational living is shifting from edge case to core demand driver in Australia’s housing market. For agents, developers and lenders, the commercial upside lies in rethinking product design, ...Read more
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Victoria’s $100m renter support push: what it means for landlords, proptech and the housing economy
Victoria has unveiled a new suite of rental support services, including a dedicated helpline for renters aged 55+, underpinned by a funding package widely reported at around $100 millionRead more
Property
The multigenerational home moves mainstream: where the next margin lives in Australian real estate
Multigenerational living is shifting from edge case to core demand driver in Australia’s housing market. For agents, developers and lenders, the commercial upside lies in rethinking product design, ...Read more
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
