Millions of Aussies worse off financially after rate cuts

RBA Governor Michele Bullock. Picture: Martin Ollman

The RBA have slashed the cash rate three times this year, saving average borrowers more than $3000 a year, but not everyone is happy, a new report has revealed.

The research, carried out by Finder revealed there are a staggering number of Aussies who claim the rate cuts have actually made them worse off.

In the survey of 1004 Australians, people were asked what impact the last three rate cuts had had on their financial situation.

Almost one in five (19 per cent) said the last three rate cuts have actually worsened their financial situation.

That’s up to a whopping 4.1 million people nationwide who don’t think they’ve benefited from the rate cuts.

And with the central bank set to meet again next week, there’s a slim chance things could get worse again.

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Finder’s home loan expert Richard Whitten.

A similar amount (20 per cent) – 4.3 million people – say interest rate reductions have improved their financial situation.

A further 61 per cent say the rate easing has had no major impact on their situation at all.

le many celebrated the Reserve Bank’s interest rate cuts, not everyone is better off, with millions claiming their financial situation has worsened, according to new research by Finder.

Borrowers celebrated their big win, with 33 per cent benefiting from reduced mortgage repayments, increased borrowing capacity (16 per cent), and the ability to pay off their mortgage quicker (14 per cent).

Savers got the short end of the stick, with 40 per cent saying their nest eggs are worse off due to lower interest rates.

Richard Whitten, home loans expert at Finder, said not everyone sees interest rate cuts as a win.

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“For millions of Australians, the recent rate cuts have been a long awaited moment of relief,” he said. “Many homeowners are finally breathing easier after a period of rising costs and financial pressure.

“But for a significant portion of the population, their savings returns have taken a hit and are growing at a much slower rate.”

Whitten said for those looking to get into the property market, a rate cut is a significant boost.

“Rate cuts directly increase borrowing capacity, which can be the difference between getting a foot in the door or being priced out.

“Lower repayments also mean more peace of mind, meaning first home buyers can enter the market with more confidence.”

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