First home buyers least likely to reduce repayments after August rate cut

New home loan trend emerges

New CommBank data shows that following CBA’s August variable rate reduction, 11 per cent of eligible home loan customers reduced their direct debit repayments - a figure slightly above, but still consistent with the proportions seen after the February and May cuts at the same point in time.

Across this year’s three variable rate cuts, most customers have kept their repayments unchanged - demonstrating a consistent trend and helping them to stay ahead of their repayments.

Executive General Manager Home Buying Marcos Meneguzzi said: “What really stands out is the consistency. Following each rate cut this year, the percentage of customers reducing their direct debit repayments has been almost identical at the same point in time. That is even as the potential savings from reducing repayments have increased.”

Across the February, May and August rate cuts, the combined monthly savings for a customer making principal and interest repayments on an average loan size of $500,000 is $240. ²

“While most customers have left their repayments unchanged, it’s important for them to know they can reduce them at any time in the CommBank app and NetBank, generally in just a few minutes. We want to make sure people feel supported and have the flexibility to manage their home loan in a way that works best for them,” Marcos said.

CommBank’s 2025 Financial Year results showed 85 per cent of home loan customers were ahead on their repayments, with an average buffer of 32 monthly payments - up from 80 per cent and 29 months at the same time in 2024. 

First home less likely to reduce home loan repayments

First home buyers were more likely to keep their repayments unchanged, with just 8 per cent choosing to reduce their direct debit amount. By comparison, 11 per cent of subsequent buyers opted to lower their repayments.

CommBank customer Libby Strassmeir, a 29-year-old occupational therapist purchased land and built her first home in Sydney two years ago and is among the nearly 8 per cent of first home buyers who chose to reduce their repayments.

While Libby hasn’t reduced her repayments to the new minimum amount, she has chosen to lower them slightly after each rate cut. This has allowed her to manage her home loan in line with her personal situation, while still building a financial buffer and increasing her cashflow.

“Keeping my repayments above the minimum gives me the capacity to live my life and enjoy things with my family and friends, while also still feeling like I am making a good financial decision, chipping away at my larger mortgage,” Libby said.

Age cohorts reducing repayments reflect different life stages

Eligible customers aged 31 to 40 were nearly twice as likely to reduce their direct debit repayments compared to those under 20, with 14 per cent making reductions, versus just 8 per cent of the younger cohort.

Meanwhile, customers over 60 were the least likely to make changes, with only 7 per cent reducing their repayments.

Looking at other age groups: 11 per cent of customers aged 21 to 30 adjusted their repayments, as did 13 per cent of those aged 41 to 50, and 9 per cent of those aged 51 to 60.

“Similar to what we’ve seen previously, the age groups choosing to reduce their repayments reflect the different life stages of our customers,” Marcos said.

“Those in their thirties and forties could be raising young families and may need more immediate financial relief, while customers over 60 or just starting out on their home loan journey were less likely to make changes, as their priorities and circumstances are quite different.”

NSW and the ACT lead the way

State-by-state, eligible customers in New South Wales and the Australian Capital Territory were most likely to reduce their home loan direct repayments, with around 14 per cent choosing to do so. Victoria followed at 12 per cent, while Queensland and South Australia both saw 9 per cent of customers making reductions.

In contrast, customers in the Northern Territory, Western Australia and Tasmania were the least likely to lower their repayments, all at 7 per cent.

Household finances show signs of recovery

With many CommBank customers choosing to stay ahead on their home loan repayments, CBA’s Head of Australian Economics Belinda Allen says there are encouraging signs of recovery in household finances.

“More broadly we are seeing the household sector show signs of improvement after a challenging couple of years. In our latest Household Spending Insights Index we have seen six months of consistently better spending momentum, led by those who rent and those who have a mortgage,” Ms Allen said.

“Improvements in household income driven by lower inflation, lower interest rates and income tax cuts have all helped. We are optimistic this trend in household spending should continue in the last few months of the year and into 2026.”