Why Haven’t My Monthly Payments Decreased Despite Three Rate Cuts?

Floating rate loans can be categorized into those obtained during the pandemic and those obtained more recently. For borrowers with pandemic-era floating rates, monthly payments have not decreased with rate cuts; instead, the loan term has shortened. It is only when the term shortens to around 30 years that monthly payments will decrease. Currently, many borrowers are looking at terms of 40-50 years, which explains why the market remains a buyer’s market. This is because the rate cuts have not significantly alleviated the loan pressure on sellers.



For borrowers with recent floating rate loans, monthly payments remain unchanged during rate cuts, but the principal portion increases while the interest portion decreases. Borrowers can apply to the bank to extend the loan term back to 30 years, which would lower their monthly payments and ease financial pressure.