Most CBA Borrowers Ignore Rate Cut, Opt to Crush Their Mortgage Faster
As of the latest Reserve Bank of Australia (RBA) decision, interest rates have taken another dip—this time by 25 basis points—bringing the cash rate down to 3.85% from 4.1%. Now, you’d think this would have most people jumping on the opportunity to lower their monthly mortgage repayments, especially in today’s cost-of-living climate. But the reality? Most borrowers, particularly those with the Commonwealth Bank of Australia (CBA), chose to stay the course. And it’s not necessarily because they didn’t know better—it was a conscious decision to get ahead on their loans.
Let’s break it down. According to recent figures, only around 14% of eligible CBA customers actually took steps to reduce their direct debit repayments following the February rate cut. Everyone else left their payments unchanged. And because of that, they’re now chipping away faster at their loan principals, which could help them save a significant amount of interest in the long run.
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Now, here’s the interesting part: CBA doesn’t automatically reduce your repayment amount when the rate goes down. Borrowers have to manually make the change—whether online, over the phone, or in person. So for many, the extra step became a kind of friction that worked in their favor. It’s a psychological trick of sorts—if you don’t go out of your way to reduce repayments, you’re naturally paying more than the minimum, and that accelerates your loan payoff.
Michael Baumann, CBA’s Home Buying Executive General Manager, pointed out that these additional repayments not only help reduce the life of the loan but also boost the borrower’s redraw balance—giving them a cushion in case of unexpected expenses. Essentially, it’s a win-win for those who can afford to stay the course.
What’s more, financial advisors like Nicole Brophy have been encouraging this approach. She notes that for people with loans north of a million dollars, this strategy could mean serious savings down the line—far beyond the $72 to $119 monthly benefit most average homeowners might see from the latest cut. Her advice? If you can afford it, keep repayments steady and use these lower rates to get ahead. It’s about long-term gain over short-term relief.
Let’s not forget: serviceability is still tight. The pressure of high grocery prices, rising insurance premiums, and everyday living costs hasn’t exactly vanished with a rate cut. So rather than banking on monthly relief, more Aussies are taking advantage of the opportunity to future-proof their finances.
With the next RBA decision on the horizon, it’ll be interesting to see whether more borrowers start to lower their payments to ease cash flow—or continue on this disciplined path toward debt-free living. But for now, it seems CBA customers are staying smart and steady.
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