The Reserve Bank of Australia (RBA) is once again staying on the fence, keeping the official cash rate on hold at 1.5%.
The RBA’s ‘steady as she goes’ approach will be welcomed by home owners. Stable rates are a real plus for managing household spending and planning your finances for the months ahead.
What’s different this time around however, is a possible swing in the RBA’s rate outlook. After rising by almost 50% over the five years to September 2017, property prices nationally have fallen by around 8% from their 2017 peaks. On top of this, we’re seeing economic growth figures that are lower than expected.
It’s not a cause for panic by any means. The local job market is strong, with full time employment on the rise, and the unemployment rate of 5% is the lowest since 2011 – all of which should help to put some pressure on wages growth.
Nonetheless, the RBA has hinted that it may be appropriate to lower the cash rate further down the track. This is quite a shift from previous RBA commentary, when it’s flagged the prospect of a rate rise at some stage being more likely.
What it means for you
The official cash rate may be holding steady for now, but that doesn’t mean your home loan rate will stay the same.
After several banks announced rate hikes late last year, the last few weeks have seen a fresh run of lenders, including us for our AHL loans, lift their variable home loan rates.
This is because the money that banks use to lend out as home loans comes from a variety of different sources, such as customer deposits and funds sourced from other areas such as local and overseas money markets.
Over the last year, the cost of these funds has risen, leading some lenders to pass on the increased cost in their funding to customers via higher interest rates.
With so many variables in the home loan market, now is the perfect time to check in with your Aussie Broker. It’s home loan advice at no cost to you, and it could leave your finances in better shape for 2019. Plus, if you have a free appointment before 30 April 2019, you’ll go in the draw to win $15,000*.
*T&Cs apply, see aussie.com.au/promotions.
