Big loan savings as rates cut 0.5 per cent

The Reserve Bank has cut official interest rates by 0.5 percentage points to 5 per cent at its April rate setting meeting.

Australian official rates are now on a par with the US and the latest cut will take around $50 off monthly repayments on the average $150,000 home loan.

The standard variable rate will now fall to around 6.8 per cent. At this level over the life of a 25-year loan borrowers maintaining their old repayments levels from January this year stand to save $42,000 in total interest payments and pay their loan off five-and-a-half years earlier.