Home borrowers should maintain their loan repayments at pre rate cut levels so their debt to the bank is paid quicker, a leading mortgagebroker says. It was said that Australian mortgage holders should keep their repayments the same, despite a recent drop in lending rates, and increase the frequency of the repayments to fortnightly, from monthly.

The Reserve Bank of Australia (RBA) cut the official cash rate by a quarter of a percentage point to seven per cent on September 2 to stimulate the slowing economy. It was the first cut to interest rates by the RBA in nearly seven years, with most commercial banks passing the drop on their home loan rates within the following week.

If borrowers forego the saving of $54 a month on a $300,000 mortgage following cuts in variable lending rates and paid it back into their loans, interest bills and loan terms would drop substantially. Borrowers can save up to $163,000 and nearly 10 years off their $200,000 loan if they pay at pre-rate cut amounts and change to fortnightly instalments theage