We’re Paying Off Our Loans Quicker
Low interest rates are leading to a trend that sees Australians paying off their mortgages far quicker than in years gone by. According to the Commonwealth Bank’s General Manager of Home Loans, Clive Van Horen, there’s been a significant rise in the amount of people who are boosting their monthly payments since the cash rate was reduced. He says an increased proportion of customers are ahead in their repayments. In years gone by, the Commonwealth had reported that 70 per cent of mortgage customers were ahead with their repayments, but that has now risen to 80 per cent.
The theory is that people are continuing to be concerned about the economy after the global economic crisis and are reassessing their priorities. When interest rates go down, if you can afford to remain paying the same amount off your loan as you were before the cut, you could cut years from your loan.