Cash rate stays anchored at 1.5%
Once again the Reserve Bank of Australia (RBA) has held the official cash rate steady at 1.5%. But pressure could be mounting for a rate cut.
Why the rate freeze?
The cash rate has sat steady at 1.5% for almost three years now – which is good news for home owners, who can enjoy a bit more certainty when it comes to home loan repayments.
The prolonged run of stable rates doesn’t mean the RBA is asleep at the wheel. It’s more a case that it’s waiting to see how the economy is tracking, and one key indicator suggests we could see the cash rate fall in 2019.
The Consumer Price Index, which measures inflation, showed zero growth in the March 2019 quarter, and climbed just 1.3% over the past 12 months.
Low inflation may be great for our back pockets, but it bothers the RBA, which is aiming for inflation of 2-3% to maintain economic growth. The bottom line is that a number of economists are predicting a future rate cut.
What today’s rate decision means for you
The cash rate may be anchored at 1.5% in a near-3-year holding pattern but there’s a twist.
A growing number of lenders have recently dropped their fixed home loan rates – some by up to 0.19%. That means there are some outstanding home loan deals on offer right now.
So, even though the cash rate is unchanged, there may be opportunities to pocket a rate cut of your own.
A quick chat with your Aussie Broker can let you know if you still have the loan that’s right for you, or if there are savings to be made. Let them crunch the numbers for you.