RBA expected to slash the cash rate this Tuesday afternoon
Most Australian mortgage holders intend to maintain their current repayment amounts, regardless of whether the Reserve Bank of Australia (RBA) implements an interest rate cut this afternoon.
According to a poll conducted by ING’s head of consumer and market insights Matt Bowen (pictured), 68% of Aussie mortgagors intend to hold the line, with the majority of these respondents saying they will direct any savings to paying down their loan principal.
Meanwhile, 43% said they would deposit the extra funds into an offset account for future access.
The RBA is widely expected to cut the cash rate by 25 basis points this afternoon, which would mark the beginning of an easing cycle following 13 rate hikes and more than a year of rates held at 4.35%.
Other mortgage holders plan to use the extra cash that will hopefully come with lower interest rats in various ways.
A third said they would save it; 13% plan to invest; 12% intend to pay down other personal debt; and 5% said they would make voluntary superannuation contributions.
In a sign that the cost-of-living crisis still haunts mortgage holders, just 3% expect to splurge on discretionary purchases.
Among those saving the money, 73% plan to build emergency savings and 54% intend to use it for travel while 19% will allocate funds for their children’s education.
Of those investing, 54% said they would buy shares, while 53% would invest in exchange-traded funds (ETFs).
For mortgage holders using the funds to pay down other debts, 68% intend to focus on credit card repayments; 44% on personal loans; and 28% on car loans.
Among the small percentage of Australians choosing to splash extra cash, popular categories include personal shopping, hobbies, entertainment and education.
This study polled 750 Australian mortgage holders aged 18 and over between 12 and 16 February.
