The Mortgage and Finance Association of Australia (MFAA) has tipped that a lot of borrowers will continue to make higher mortgage repayments, regardless of the Reserve’s 1.00% cut to the official cash interest rate announced this afternoon.

“Unless they are experiencing financial difficulty, mortgage holders prefer to continue making higher loan repayments so they can pay off their debt sooner rather than later,” Mr Phil Naylor, CEO of the MFAA said.

“Evidence so far from our research shows that anywhere from two thirds to three quarters of mortgage holders still prefer to make higher repayments with the aim to pay off their mortgage quicker.

“Obviously, borrowers that are experiencing more difficultly are using the money saved as a result of the drop in rates to cover their daily requirements,” said Mr Naylor.

“The prospect of future cuts will depend on the Reserve’s assessment of the economy and how effective the last few drastic interest rate adjustments have been. The difficulty the Reserve has is that the decision made today may take a month or even six weeks before its impact on the economy is able to be assessed,” Mr Naylor said.