Mortgage specialist Resi Mortgage Corporation has welcomed today’s interest rate cut by the central bank, saying it signals the beginning of a downward trend in rates.
But Resi head of consumer advocacy Lisa Montgomery said there was still a long road ahead for many borrowers and they should be urged to look at any interest saved and re-direct it to pay down credit cards or loans.
“All lenders will be looking at what they can realistically do for their customers, but it’s important that the borrowers themselves see this rate cut for what it is – a step in the right direction,” she said in a statement.
“In terms of how mortgage holders respond to any financial advantage gained by today’s announcement, we would urge them to crawl before they walk and continue to exercise restraint with their discretionary spending.
“However, if borrowers are in a position to continue repayments on their mortgage at their current levels and do not have to service other high interest debts, they should continue with their current repayments, enabling them to pay off their mortgage sooner.”
The Reserve Bank of Australia today it would lower the cash rate to 7.0 per cent, from 7.25 per cent.