Interest Rate Cut - Yes; Minimum Payment - Not So Fast

DaaC on 18/03/2025 - 01:36
Last edited 18/03/2025 - 09:37 by 1 other user

Home loan rate cut kicked in, ANZ passed it on—great. But when next payment was due, the minimum repayment didn’t budge.

Called the bank, and here’s the kicker—even though the interest rate dropped on February 28, the lower repayment won’t take effect for 37 business days. So while I’m paying less interest, I’m stuck with the same repayment until May.

Why the delay? No real answer. Is this just ANZ, or do all banks do this? Would love to hear from the OzBargain community—has anyone else experienced this with their bank?

Edit: This is an investment property

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Comments

  • JVHifi on 18/03/2025 - 01:59

    Sounds a bit dodgy, but maybe they just think most ppl won't really cause a fuss about it and so they can get away with it.

    I'm with ME Bank and they dropped their rate March 7 (yes, one week later than others) along with repayments so my last repayment 3 days ago was the lowered amount.

    • May4th on 18/03/2025 - 07:19
      +22

      get away with what? having you pay more principal so they make less interest on it later?

      • brendanm on 18/03/2025 - 09:36
        +5

        Those devious scumbags!

  • Jake D on 18/03/2025 - 03:02
    +6

    Some banks never automatically drop the minimum payment. You need to request the change. Positive being you pay off your mortgage faster (assuming that's your plan).

  • bazingaa on 18/03/2025 - 05:18
    +3

    in CBA, we can set any amount in the app. After the rate cut, we could set a reduced minimum payment immediately

  • MS Paint on 18/03/2025 - 06:17
    +18

    If things are that desperate then you have over borrowed.

  • oscargamer on 18/03/2025 - 06:59
    +3

    So you pay a tiny bit more off the capital. Why is that a bad thing?

    • Jake D on 18/03/2025 - 10:26

      Tax deductibility.

      • May4th on 18/03/2025 - 10:29
        +1

        they should be on an interest free loan where principal isn't an issue if it's an investment loan set up to maximise tax efficiency

        • Jake D on 18/03/2025 - 12:10

          Yes.

        • paulojr on 18/03/2025 - 22:00

          Ideally yes, not always that simple dude .

        • gromit on 19/03/2025 - 10:31
          +1

          interest free? I assume you mean interest only?

  • JIMB0 on 18/03/2025 - 07:15
    +1

    When I was with CBA I couldn't set it any lower than $2 per week no matter how much was owing.

  • Russell Dupsumtucka on 18/03/2025 - 07:55
    +2

    StGeorge are doing the same thing, my minimum repayment won't change until May.
    However, both my March and April payments will be calculated at the lower rate so I will be paying off more prinipal on the load.
    And am I really going to notice the $15-$20 per month extra in my account over 2 months, barely.
    Maybe I can go get some of that 'coffee a day' or 'avo on toast' the economists rave about?

  • DingoBilly on 18/03/2025 - 08:41

    This is generally a good thing, and it actually benefits you as opposed to benefiting the bank.

  • Baysew on 18/03/2025 - 08:41
    +1

    What is the difference in the monthly repayment amount?

    • MS Paint on 18/03/2025 - 09:08

      Nice. Then you can reverse engineer the results to calculate OPs loan debt.

      • Baysew on 18/03/2025 - 16:15

        I just to calculate the right amount of kicker outrage I should have.

  • plmko on 18/03/2025 - 09:16
    -1

    How much would 0.25% affect?

    Borrowing $1mil on a 30yr loan would be like $20?

    • stuffandthat on 18/03/2025 - 09:17

      Mine is half of that and went down $70.

    • SnoozeAndLose on 18/03/2025 - 12:15

      It should be $208.33… reduction monthly

      Unregarde of the load term increase rate on $1,000,000 is $2,500 per year and around $208.33 monthly.

      Not $20

  • stuffandthat on 18/03/2025 - 09:16

    Same with Macquarie. I have to wait until my April payment.

  • Bargainitis on 18/03/2025 - 09:17

    Just to be clear, you do understand that it just means you are paying off more of the principal right? its not like banks are stealing your money on the interest rate delta (they are crooks I know!).

  • brendanm on 18/03/2025 - 09:35
    +3

    That's a good thing, pays the loan out quicker.

    • Jake D on 18/03/2025 - 10:28

      Assuming you don't have other loans you want to pay out quicker first.

      • brendanm on 18/03/2025 - 17:42
        -1

        Be more financially responsible then.

        • Jake D on 18/03/2025 - 18:06
          +1

          Paying down your PPOR loan before your investment loan is financially responsible.

  • mrkorrupt on 18/03/2025 - 10:21
    +1

    As someone who tries his hardest to not pay any interest, why do you want to pay the minimum? do you like paying more and getting less?

    • Pufff on 18/03/2025 - 10:26

      Because in Aus many people somehow believe that losing money for a deduction is a good thing.

      • Jake D on 18/03/2025 - 12:09

        Paying down (or offsetting) non-deductible debt before deductible debt first is a good thing.

    • sneijder on 18/03/2025 - 10:44
      +1

      OP might have another mortgage on his residence which he wishes to pay down first.

  • 7ekn00 on 18/03/2025 - 12:01
    +1

    How do you think all the majors make a billion dollars profit each year?!?

    HINT: it's not by instantly dropping rates :P

    • tenpercent on 18/03/2025 - 13:47
      +1

      I thought it was by lending money they don't have and collecting interest on the money they never had in the first place.

  • ihbh on 18/03/2025 - 13:41

    Don't sweat the small stuff; or move to another bank after checking their T&Cs … re when they drop minimum payments.

  • Brick Tamland on 18/03/2025 - 14:18

    I am with ANZ, you need to request the change. They advise you of that in the interest rate drop letter they sent.

  • Drakesy on 18/03/2025 - 15:04

    From my experience your payment will stay the same, just how fast you pay down the principle will be quicker.

  • SnoozeAndLose on 18/03/2025 - 15:21

    I just messaged ANZ via the app and they have updated the minimum repayment amount and will be effective on the next payment date

    • DaaC on 18/03/2025 - 20:54

      This is from the ANZ App

      Hi <name>, thank you for reaching out. Apologies with the delay.

      When an interest rate on a loan is reduced, it'll take at least 37 days before it’s reflected for the minimum repayment amount.

      I see that your repayments will be $$$$, starting from 14/05 for loan ending ####.

      • SnoozeAndLose on 19/03/2025 - 11:01

        just ask them if they can change the date to the immediate date, they have assisted me in this way

  • gromit on 19/03/2025 - 07:14

    when I had a CBA home loan they never reduced my repayments at all, they provided offers to lower them each time (which I never took up). They lose out by you having higher repayments. Obviously if you are desperate and need them lower then reach out to them after 37 days,

  • Morphio25 on 19/03/2025 - 07:26
    +1

    An investment property? My heart bleeds for you…

    FWIW Athena lowered my rate and repayment within 15 minutes of the RBA decision. Maybe try going with a less shit bank?

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