Interest rates can sometimes seem like the movie that never ends. Just when you think you’ve got them all figured out, there’s another twist in the tale and you’re right back on the edge of your seat. The Reserve Bank of Australia has kept up the suspense with its latest decision. In an announcement on April 7, Governor Glenn Stevens put the speculation to bed and revealed the bank was keeping the official cash rate on hold for another month.

This is the second month in a row that interest rates have stayed stable and it has a few people wondering: When will the next trim come? The answer is still unknown, but what you might be able to figure out is how the record low rates are affecting your saving efforts. Whether you’re gathering the funds to buy a house, or making repayments on your current home loan, interest rates can have a big impact.

What are Australians saving for?

The most recent Household Financial Conditions report from the St.George -Melbourne Institute has revealed a few interesting tidbits on this point. The results show Australians are paying off their debts more quickly than they were a year ago, which also improves their ability to save. In fact, there were 5.9 per cent fewer households with mortgage debt over the year to March – and the bulk of home loan holders are making repayments using less than 25 per cent of their income.

There are some real savings advantages from this. For example, compared to the average variable rate of 6.8 per cent back in 2011, with the current level at 4.9 per cent a $400,000 loan could save you around $7,800 in interest repayments over the space of a year, according to CoreLogic.

Paying off the home loan may be a little easier, but the next thing to figure out is how you can put your extra savings capacity to good use. The index found that most households – 60.4 per cent – are saving to travel or take a holiday, while saving for a rainy day was another big motivator. However, if you’re thinking about a good way to grow your wealth, taking out an investment home loan could be a solid solution to get there.

What about property investment?

The index suggested that more Australians have a taste for investing their savings in the property market, rather than putting it in the bank. Just over 25 per cent of respondents said they were interested in investing in property in the March quarter, which is a big leap up from 20 per cent recorded in December. There are a number of things to consider before going down this path, however. While you may be paying less in interest, you’re still taking on debt.

It’s worth getting advice from a Smartline Mortgage Adviser on this matter.They can help you determine whether investing in a house is a suitable way for you to provide for a comfortable retirement.

You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!