The Reserve Bank of Australia (RBA) recently announced a 0.25% cut to the cash rate down to 1.5%.
Most banks have passed on some of the cut with most cutting the standard variable rate on home loans by about 0.13%.
Many people believe that banks should be passing on the full RBA rate cut, most mortgage holders would agree I am sure.
There are several reasons for the RBA cutting rates, in the statement released by the RBA mainly to support stronger economic growth within Australia by encouraging private and business lending. You can read the full RBA monetary statement for August 2016 by following this link http://www.rba.gov.au/media-releases/2016/mr-16-18.html
There is various uncertainty within the Australian economy, with the continued weakening of the mining industry and other sectors experiencing low growth rates. The unemployment across the nation is heading higher, with some states experiencing worsening rates at a faster rate.
We have seen central banks in other countries lower their rates to 0% and some countries even experimenting with negative interest rates. The way things are in Australia, it would seem very unlikely that interest rates would go this low but should there be greater economic downturn and worsening business conditions, there is a remote chance of the interest rate heading towards 0%.
Whatever is happening in the economy and the RBA’s decision to cut rates, one thing is for sure, the lowering of interest rates will always be welcome news to mortgage holders.
If you a looking to ‘check in’ with your existing loan, or think it is time to borrow for that investment property or even want to borrow to buy your first or new home, why not contact us through our website www.myloanfinder.com.au
All the best!
The Editor – MyLoanFinder.com.au
*** Disclaimer ***
This post is intended as broad commentary and should not be taken as general or personal advice.