Rate cut savings going into loan: survey

Rate cut savings going into loan: survey

18 January 2012 by Staff Reporter 0 comments

Staff Reporter

Australian home owners are taking advantage of the latest rate cuts, with the majority putting the extra savings towards the principal loan.

A new poll by PRDnationwide found 68 per cent of borrowers will pay down their mortgage sooner thanks to the two rate cuts in November and December 2011.

According to the survey, 18 per cent of borrowers said they plan to put the extra away as savings, while eight per cent said they will spend the cash on discretionary items.

PRDnationwide research director Aaron Maskrey said the survey showed six per cent of respondents would spend the saved money on staple goods.

"These people are most relieved to see the RBA reduce the official cash rate – as they were probably struggling to afford the loan repayments," he said.

Mr Maskrey said the RBA was expected to announce further reductions next month.

Only recently, AMP's senior economist Bob Cunneen predicted the cash rate will drop to 4.0 per cent.

"Using the discount towards the principal is very savvy and a reflection of borrowers feeling vulnerable during a period of economic instability," said Mr Maskrey.

Staff Reporter

Australian home owners are taking advantage of the latest rate cuts, with the majority putting the extra savings towards the principal loan.

A new poll by PRDnationwide found 68 per cent of borrowers will pay down their mortgage sooner thanks to the two rate cuts in November and December 2011.

According to the survey, 18 per cent of borrowers said they plan to put the extra away as savings, while eight per cent said they will spend the cash on discretionary items.

PRDnationwide research director Aaron Maskrey said the survey showed six per cent of respondents would spend the saved money on staple goods.

"These people are most relieved to see the RBA reduce the official cash rate – as they were probably struggling to afford the loan repayments," he said.

Mr Maskrey said the RBA was expected to announce further reductions next month.

Only recently, AMP's senior economist Bob Cunneen predicted the cash rate will drop to 4.0 per cent.

"Using the discount towards the principal is very savvy and a reflection of borrowers feeling vulnerable during a period of economic instability," said Mr Maskrey.

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2016

With a combined sales volume of $13 billion in 2016, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
William Phillips on how agents can expand their database and grow their business

Get up close and personal with the best real estate sales agents in Australia in Secrets of the Top 100 Agents. ...

View all podcasts

Are dodgy agents being punished enough?

Yes (8.6%)
No (55%)
Only in some states (2.3%)
Not all dodgy agents are being found out (34.1%)

Total votes: 220
The voting for this poll has ended on: April 15, 2017
upcoming events
REB Awards
Sydney The Event Centre 12 Sep
REB Awards
Sydney The Event Centre 12 Sep
Melbourne The Event Centre 14 Oct
Brisbane The Event Centre 18 Dec
View all events
Do you have an industry update?