What you'll save if banks follow RBA on interest rates

If the country's major banks follow the Reserve Bank’s lead and drop interest rates, mortgage holders could be the big winners.

The Reserve Bank of Australia this afternoon dropped interest rates by 0.25 per cent to 2.25 per cent, a record low.

READ MORE: Dollar falls after RBA drops interest rates

Read on to find out what you will save on your mortgage if the banks follow suit.

WHAT YOU'LL SAVE IF BANKS FOLLOW RBA

Repayments on a $300,000 mortgage will drop by $45 a month on average if retail banks fully pass on Tuesday's 25-basis-point cut in the cash rate by the Reserve Bank.

If your mortgage is:

• $100,000 - $626.09 - $15.16 cut

• $150,000 - $939.13 - $22.74 cut

• $200,000 - $1252.18 - $30.32 cut

• $250,000 - $1565.22 - $37.90 cut

• $300,000 - $1878.27 - $45.48 cut

• $350,000 - $2191.31 - $53.06 cut

• $400,000 - $2504.35 - $60.64 cut

• $450,000 - $2817.40 - $68.22 cut

• $500,000 - $3130.44 - $75.80 cut

This assumes 25-year standard variable rate loan at an average new interest rate of 5.7 per cent.

(Source - CommSec)

With AAP.