Tuesday 6th June 2017Consumers Caught in Camp Confusion on Interest Rates
Mortgage holders are caught in camp confusion as the Reserve Bank of Australia (RBA) stays on the sidelines despite a stagnant economy while banks continue to lift their interest rates, says mortgage broker network 1300HomeLoan.
1300 HomeLoan Managing Director John Kolenda said the state of confusion for consumers prevails with the RBA maintaining its cash rate at a record low of 1.5 per cent.
Mr Kolenda said the current situation for mortgage holders has been exacerbated by lenders continuing to hike rates independently of the RBA due to cost of funding issues.
“Consumers cannot expect any relief from the RBA any time soon because the central bank is worried about the impact of an interest rate cut in the bullish property markets of Sydney and Melbourne,” he said.
Mr Kolenda said the sluggish domestic economy and subdued consumer sentiment are normally triggers for a rate reduction but that is unlikely in the short term and any cut could also be nullified by out of cycle hikes by lenders.
“Rates are moving outside any decisions being made by the RBA as lenders are exposed to global markets and cost of funds,” he said.
“The greater confusion for home loan customers has reinforced the need to use a mortgage broker. There are rate movements across different products which is creating large variations across lenders. Finding the right product at the right price is very challenging but having a broker by your side may help to secure a better deal.
“Complacency when it comes to their home loan in the current lending landscape could be costing mortgages holders thousands of dollars a year.”