Having seen improvements in both consumer and business confidence, as well as a strong improvement in the global economy, the Reserve Bank of Australia (RBA) has elected to leave the cash rate on hold at the historical low of 1.50%. Governor Philip Lowe had this to say in his official statement:
“Financial institutions remain in a good position to lend. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.”
“Conditions in the housing market vary considerably around the country. In some markets, conditions are strong and prices are rising briskly. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Growth in rents is the slowest for two decades. Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards.”
So, what does all this mean for you? Despite the recent cash rate hold, lenders are free to change their rate at their own discretion. Keep a close eye on any rate movement, and consider whether your current loan is the right one for you, right now.