For the 3rd time in five months the Reserve Bank of Australia has decided to reduce the official cash rate, this time to 0.75%, in a concentrated effort to boost the economy.
In making the decision to lower rates again the RBA has strongly reinforced its focus on supporting employment growth and boosting household consumption to restore inflation to within its target range of 2 -3% pa.
The RBA will also have been very conscious of the impact on Australia’s exchange rate and the competitiveness of our exports had it not reduced rates in line with global trends.
This table shows how Australia’s average mortgage sizes may be affected:
Lenders will now be under heavy political pressure to pass the rate reduction on. Of course, some may choose not to pass the full cut on, so it is always important to review your lending options regularly to ensure that they remain the most suitable for your current situation.