The average borrower with a $180,000 housing loan will have an extra $33 a month in their pocket following this week’s quarter of a percent interest rate cut.

The saving - equivalent to about a quarter of a tank of petrol or a carton of beer - could double in the next few months if predictions of another interest cut come to fruition.

Dubbo banking official Kevin Parker regards the first reduction in the cash rate for almost seven years as good news but borrowers aren’t doing cartwheels just yet.

“Families are still under considerable pressure due to the high price of petrol and ever increasing living costs,’’ the Bank of Queensland manager said.

“Rising interest rates have been a real concern for many people but they haven’t been that high in comparison to the 1990s when borrowers were paying 18 per cent.

“I doubt rates will get that high again. If they did a lot of people would go bust.’’

Mr Parker said 20 years ago the average housing loan was $80,000. Now most people are borrowing at least $100,000 more.

“Properties have increased in value and expectations are different,’’ he said.

“Back then people thought they were doing well to purchase a three-bedroom home with one bathroom. Now an ensuite is viewed as a basic requirement and buyers tend to want everything that opens and shuts.

“People need to live in the real world when it comes to borrowing money. It’s important to look at income and expenses and to work out a detailed budget.’’

Mr Parker purchased his first house for $18,000 back in 1970. He said a similar property would cost an extra $200,000 today.

“Back then it was standard practice for young couples to start small and work their way up.

“In those days husbands went out to work and many wives stayed home to look after the children. Now life is all about dual incomes and young children heading off to day-care centres.

“It takes two incomes to survive at a reasonable standard.

“Owning a house is still the Australian dream but there are plenty of people happy to rent.’’