Commonwealth Bank reveals surprising $76,500 repayment trend following RBA's three interest rate cuts

Australia’s largest bank Commonwealth Bank has shown that only one in ten home loan customers reduced their repayments after the Reserve Bank of Australia cut interest rates in August. Even though people are facing cost-of-living pressures most borrowers have not been quick to take the relief offered. Instead they are working to pay off their loans faster by keeping their repayments at the same level. The bank’s findings suggest that many Australians are using this opportunity to build a financial buffer rather than ease their monthly expenses. This approach helps them pay down their mortgage principal more quickly and potentially save thousands of dollars in interest over the life of their loan. Financial experts note that this behavior reflects a cautious mindset among homeowners who may be concerned about future economic uncertainty. By maintaining higher repayments when rates drop these customers are essentially giving themselves a head start on their debt reduction goals. Commonwealth Bank’s data provides insight into how Australian households are managing their finances during a period of economic adjustment. The decision to keep repayments high despite lower interest rates shows that many people are prioritizing long-term financial security over short-term cash flow relief.

The RBA is widely expected to keep the cash rate at 3.60 per cent when it meets in September this week. Commonwealth Bank and Westpac along with ANZ believe the next rate cut will not happen until February. NAB has a different view and thinks cuts will be delayed even further until May 2026.

Cameron Capital founder Mary Cameron spoke with Yahoo Finance about a practical approach to managing your mortgage. She explained that maintaining your current repayment amount even after interest rate cuts could be an effective strategy. This method allows homeowners to reduce their overall home loan balance & complete their mortgage payments in a shorter timeframe.

Customer Behaviour After Rate Cuts

Commonwealth Bank data showed that only 11 percent of eligible home loan customers lowered their direct debt repayments following the August rate cut. This figure was marginally higher than the numbers recorded after the February and May rate cuts. First-home buyers demonstrated even less inclination to adjust their payments with approximately 8 percent choosing to reduce their repayments.

Customers between 31 and 40 years old changed their repayments more than any other age group. About 14 percent of them chose to reduce their payments. In comparison only 11 percent of customers aged 21 to 30 made reductions. The number dropped further for those aged 51 to 60 with just 9 percent choosing to lower their repayments.

Impact on Loan Repayments and Savings

The three rate cuts have resulted in combined monthly savings of $240 for customers who are paying principal & interest on an average loan of $500000. Marcos Meneguzzi is the executive general manager of home buying. He pointed out that customers have consistently chosen to keep their repayment amounts the same despite the three rate cuts.

Bank Policies on Repayment Adjustments

Westpac stands alone among Australia’s Big Four banks by automatically reducing repayments for customers who pay the minimum required amount. Customers with CBA NAB and ANZ need to reach out to their bank directly if they want to lower their repayments. Even with this option available, most borrowers continue to pay more than required. About 85 percent of CBA customers are ahead on their home loan repayments and have built up an average buffer equivalent to 32 monthly payments.

Summary and Expectations for Future Rate Cuts

Experts now believe the RBA will keep the cash rate at 3.60 per cent for the coming months without any immediate rate cuts expected. Some banks including CBA and NAB predict a rate cut in February 2026 while other major banks like Westpac also expect the cut to arrive in February 2026. The future remains uncertain but inflation and economic conditions will likely shape the RBA’s next decision.