Wednesday 7th February 2018Cash in While Cash Rate Stays at Record Lows
Mortgage holders should be badgering their bank for an interest rate cut while the Reserve Bank of Australia (RBA) maintains its cash rate at record lows, says mortgage broker network 1300HomeLoan.
1300HomeLoan Managing Director John Kolenda said home loan customers could cost themselves thousands of dollars by not being proactive in the current lending environment with variable interest rates below 3.5 per cent on offer.
Mr Kolenda said the RBA has kept official interest rates at an all-time low of 1.5 per cent for a record 16 consecutive meetings since the last rate movement in August, 2016, with no change expected in the near future.
“Slow wage growth and sluggish inflation is likely to keep the RBA on the sidelines but that doesn’t mean home owners can sit back and be relaxed and comfortable,” Mr Kolenda said.
“Complacency could cost mortgage holders thousands of dollars and in the current climate it’s pertinent for home owners to seek expert advice from a mortgage broker to secure the best interest rate possible and save money.
“With a slowing mortgage market, some lenders have cut rates to attract new borrowers. The competition will heat up and see more pressure on reducing rates by lenders to curb a slowdown in anticipated volumes.”
Mr Kolenda said the RBA maintaining its holding pattern on official rates has provided much needed stability for mortgage holders during challenging economic times.
“A generation of mortgage holders hasn’t experienced a hike in official interest rates as it has been more than seven years since the last increase in the cash rate,” Mr Kolenda said.
“We hope the central bank maintains its highly cautionary approach and any potential rate rises down the track are at a miniscule amount and over a protracted period to avoid causing unnecessary panic among mortgage holders unaccustomed to increases.”