Interest rates on hold

Mortgage holders were given a boost today when the Reserve Bank decided to keep interest rates on hold.

While the move is hardly a surprise, it will still be welcome news for people paying off a mortgage.

Each 0.25 per cent interest rate rise adds another $60 to the monthly cost of an average Australian mortgage.

The official interest rate is now 4.75 per cent. Mortgage holders on variable interest rates are being charged a standard variable rate of about 7.83 per cent by their lenders.

Mortgage holders wanting to pay down their debt faster should take the opportunity to pay a little more off their loan now.

On a new 25-year $370,000 mortgage, if you paid an extra $60 per month, or about the equivalent of a 0.25 per cent rate rise, you could clear your mortgage 17 months sooner and save $30,085 in interest.

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