With the uncertainty of the federal election behind it, the RBA has decided to reduce the official cash rate to a record low of 1.25% as it tries to stimulate household spending and the economy. This is the first rate move since August 2016.
In making this decision the RBA has taken into account inflation being below its target range of 2-3%, continued pressure on house prices, evidence of rising levels of mortgage stress, a borrowing squeeze in response to the Banking Royal Commission, slow wages growth and continued concerns around the level of under employment.
Here is a table showing how Australia’s average mortgage sizes may be affected:
Of course there is no guarantee that lenders will pass on the savings from this rate cut, but potentially there could be a little extra room in your family’s budget.
Don’t forget, it’s important to review your lending options regularly to ensure they remain the most suitable for your situation. There may be different rates available from our wide panel of lenders and we’re always available to ensure that you have the right financial solution for your current and future circumstances.
Please contact us if you’d like to chat about your options, we’d love to help.