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Borrower behaviour: Who’s dropping their loan repayments?
Borrower behaviour across age groups differed following the August rate cut, with some cohorts far more likely to reduce their direct debit repayments, a big four bank has reported.
New data from the Commonwealth Bank of Australia (CBA) revealed that 11 per cent of eligible home loan customers have reduced their direct debit repayments following the Reserve Bank’s August rate cut.
The report broke down the data by each age cohort, with Millennials being more likely to reduce their repayments following the rate cuts.
According to the data, CBA’s customers aged 31 to 40 were the most likely to reduce their home loan repayments, with 14 per cent doing so – nearly twice as likely as customers under 20.
Just 8 per cent of under-20 borrowers cut their repayments after the August rate drop, compared with 11 per cent of those aged 21–30.
Meanwhile, 13 per cent of borrowers aged 41–50 cut their home loan repayments after the rate drop, compared with just 9 per cent of those aged 51–60.
In contrast, eligible CBA customers over 60 were the least likely to amend their direct debit repayments, with only 7 per cent making changes.
Additionally, first home buyers were found to be less likely to change their repayments, with just 8 per cent of the cohort reducing their direct debit amount.
According to CBA’s 2025 financial year results, the findings have been consistent with the data following previous rate cuts this year, signalling a trend per age group.
Executive general manager, home buying, Marcos Meneguzzi, said the decisions of each cohort regarding whether to reduce repayments reflect the different life stages for customers.
“Those in their 30s and 40s could be raising young families and may need more immediate financial relief,” he said.
“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.”
CBA said across the three rate cuts, customers with a $500,000 principal and interest loan have been reducing their monthly repayment by $240.
On a state-by-state basis, the data found eligible customers in NSW and the ACT were most likely to reduce their repayments, with around 14 per cent choosing to do so in each state.
Victoria followed at 12 per cent, while Queensland and South Australia saw 9 per cent of customers reducing their repayments.
Contrastingly, customers in the Northern Territory, Western Australia, and Tasmania were the least likely to lower their repayments, with all states recording a 7 per cent decrease.
CBA’s head of Australian economics, Belinda Allen, said household finances are recovering, supported by lower inflation, falling interest rates, and recent income tax cuts.
“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,” Allen said.
“We are optimistic this trend in household spending should continue in the last few months of the year and into 2026,” she concluded.