Wednesday, September 7th, 2011
Yesterday’s Reserve Bank decision to keep the cash rate steady for a tenth successive month is cause for celebration, though a rate reduction would have resulted in more than half of all Australians with home loans building a bigger financial buffer against mortgage stress.

A national survey of 1,000+ homeowners and investors commissioned by Mortgage Choice and completed this week found 50% intend to contribute more to their home loan if interest rates fall over the coming months, rather than spend any additional funds. 7% will spend more but also save more by contributing extra to their home loan.

As for the remaining respondents:
• 30% will ‘save more money in some other way’
• 6% will ‘spend more but also save more in some other way’
• 4% will ‘spend more and save the same amount’

Only 4% will throw caution to the wind and spend more without saving any money at all.

Mortgage Choice spokesperson Kristy Sheppard said, “Sanity prevailed with September’s cash rate decision. It should lead to improved consumer and business confidence as spring moves in.

“A rate rise would have increased the financial strain on businesses within housing, manufacturing, retail and many other industries. Ongoing rate stability will hopefully see them move to steadier ground, to a position where they feel less pressure to cut employee hours or reduce staff numbers.

“Borrowers will be delighted with the decision, but obviously would have been much more relieved to see a rate drop. However, steady rates probably won’t result in most heading back to the shops.

“Our new national survey discovered only one in five of the 1,000-plus respondents, all of whom were mortgage holders, will spend more if interest rates drop. In fact, every second person will simply contribute all extra funds into their home loan.

“96% will save more money or the same as they have been if rates fall, which clearly demonstrates the mindset of today’s cautious consumer. De-leveraging while building a protective financial shield against tougher times is very much at the forefront of their decision making.

“Our findings also indicate current interest rates aren’t contributing to borrower stress as a number of commentators suggest. What they are doing is stopping the majority of mortgage holders from creating a bigger financial buffer via making extra repayments.”

For home loan tips, trends, facts, data and other information, visit, or Or, call 13 MORTGAGE.

Contact Profile

Mortgage Choice

Australia’s largest independently-owned mortgage broker, Mortgage Choice has sourced a home loan for well over 300,000 people since 1992. It works with all manner of property finance borrowers via hundreds of franchises.

The company writes one in every 25 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many of its brokers provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and risk and general insurances.

Uniquely, Mortgage Choice pays its franchisees the same commission rate for home loans they write, regardless of rate paid by the lender a new customer selects, working in the customer’s best interests to tailor a solution to them.

The company has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).

Recent recognition: 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; No.1 on The Adviser magazine’s 2011, 2010 and 2009 Top 25 Brokerages list; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2010 Forbes Asia-Pacific Best Under A Billion list.

Mortgage Choice holds an Australian Credit Licence: no. 382869, issued by ASIC.

Visit or call customer service on 13 MORTGAGE.
Kristy Sheppard
P: (02) 8907 0502
M: 0407 450 860


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