Maintain your repayments if interest rates drop

If interest rates fall, maintain your repayments at the same level. You are already used to not having the extra dollars so stick to the same repayment amount.
For example:

• $300,000 loan at 7.50% (principal and interest) over 30 years
  Monthly repayment - approx $2,098
• $300,000 loan at 7.25% (principal and interest) over 30 years
  Monthly repayment - approx $2,047

By continuing to pay $2,098 per month you would be overpaying by $51 per which could save you $40,000 in interest over the term of the loan and reduce your term by over 2 years!

---

Kindergarten economics
In theory, if everyone did this instead of spending the $51, it would keep the pressure on retailers and would, in turn, maintain pressure on RBA to cut interest rates again...... in theory!!! 

It would be a theory worth testing (if we could get the whole country on board) - would need someone like Mark Bouris or David Koch to push this experiment.  How about it Mr Bouris, Kochie - either of you willing to give this a go to help "Middle Australia" get out of debt quicker?

---

This example is based an initial loan of $300,000 over 30 years at a rate of 7.5%. The savings are not exact and are designed to be nothing more than thought provoking. The scenarios are generic and do not take individual circumstances into account. You should seek independent financial advice before making any significant changes to your financial products.
-