“The board will keep doing what it needs to do to keep inflation down and maintain a healthy jobs market because when inflation is low and stable and people can get jobs; it’s good for households, it’s good for the community, and it’s good for the broader Australian economy.”

So how much will mortgage holders save?

Household savings on the way

Including the two previous rate cuts in February and May, the accumulated savings are even higher. Those with a $500,000 loan could potentially save $226 per month, while those with a $1 million loan could save up to $453 per month.

Source: SBS News

Will the banks pass the savings on?

ANZ and NAB have followed suit. Around 20 lenders also cut their variable rate ahead of the RBA’s announcement.

A number of major banks have promised to pass on the rate cut in full to customers. Source: AAP / Rick Rycroft

Diana Mousina, deputy chief economist at AMP, urges caution as not all mortgage holders will be eligible for an automatic reduction.

“There’s not this automatic reduction to mortgage rates just because of what the RBA does. It may take a few months for it to actually get passed through to mortgage repayments.”

Paying more now to save later

“Every rate cut is another opportunity to invest back into your mortgage and potentially be debt-free months, if not years early.”

Ultimately, Tindall urges mortgage holders to weigh up what is best for them.

A good time to talk to the bank