Posted on: 05.05.2016
Recently on the 3rd of May, the Reserve Bank of Australia had it’s board meeting and reduced the cash rate by 25 basis points. Making the official cash rate now 1.75%.
It seems as though the Reserve Bank has reacted to concerns of the strength of the Australian Dollar and the effect it is having on export businesses and tourism. Another contributing factor is also the slowing down of our housing market and inflation dropping below their target range of 2.5 – 3%.
Low interest rates for the past few years has supported demand as well as the lower exchange rate assisting the traded sector. Credit growth to households continues at a moderate pace, whilst in businesses it has increased over the past year or so.
Information continues to show that the Australian economy is re-balancing from the mining investment boom. The monetary value of goods and services produced in Australia (the GDP) increased over 2015 and indications show that this is continuing in 2016.
The Reserve Bank board took recent housing developments into consideration. As well as strong supervisory measures that have improved lending standards. Also, the potential risks of lowering the interest rate currently are lower than they were last year.
To assist with the prospects of growth in the economy and help inflation return to target over time, the board decided that the easing of monetary policy would assist the improvement of the Australian economy.
The cash rate has moved up and down for many years. The graph below shows a comparison over the years of just how low the present cash rate of 1.75% is. There has factually never been a better time to review your current home loan/s structuring and save yourself money.
Official interest rate chart – ABC News (Australian Broadcasting Corporation)
Below is a graph showing how the different Home Loan sizes may be affected:
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With Banks and Lenders starting to pass on this discount in fixed and variable rates, it’s a great time to review your lending.
Don’t miss out on these current interest rates while they’re low. Find out how much you might be eligible to save on your lending, get the Kirsty Gray to contact you today via Phone or Email and take advantage while rates are at a record low. – Request a call/email
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