Yes! Another month of super low rates!
It may be cold outside but today the Reserve Bank of Australia (RBA) delivered some warming news to homeowners, keeping the official cash rate on hold – yet again, at 1.5%.
We’re now at a record 24 months without a change to the official cash rate, and the RBA seems happy to let the cash rate hold steady for a couple of reasons.
First, our economy notched up impressive growth of 3.1% over the last 12 months – a better than expected result. In addition, property price growth has settled down, especially in Sydney and Melbourne.
On the flipside, Australians are carrying high levels of debt, and while the RBA says household assets are worth five times the value of our collective debt, it knows that any rate hikes could impact personal spending, which in turn could put the brakes on economic growth.
So why might your interest rate still rise?
The cash rate may be on hold but there’s plenty of action going on behind the scenes in the mortgage market that you need to know about.
Recent months have seen some lenders – who set the rates we actually pay – start to raise their home loan interest rates. This is because funding costs for lenders have been rising for several months, and they can either take the hit to their profits or pass on some of these higher costs to customers. But, in a competitive market like ours, other lenders have cut their rates – particularly for new customers.