7 May, 2020
The news followed RBA Governor Phillip Lowe’s April 21 speech where he affirmed that the cash rate would not be increased until “sustainable progress” is made towards goals for full employment and inflation.
Now that monetary policy has reach its lowest bound – at least for the time being – the central bank is instead focusing on how it and the government can best support policy that will ensure the ongoing availability of credit.
Following March’s back-to-back rate cuts, we are now starting to see some of the lowest home loan interest rates ever.
While interest rates will likely rise again at some point in the future, The RBA has indicated that it won’t be anytime soon.
In the previous minutes, the RBA detailed that it expected the cash rate “would remain at a very low level for several years”.
It is anticipated that no positive cash rate moves will be made until progress is made towards full employment and inflation reaches a sustainable 2 – 3%.
Although the cash rate has remained at 0.25%, numbers are already circulating about how much customers could potentially stand to save on their home loan if they were to shop around.
Below is an example of the potential savings someone could make by switching to a product with a lower interest rate:
|Loan Size||Example Rate||New Rate||Monthly Savings||Annual Savings|
Since the start of March, the larger banks cut variable mortgage interest rates by approximately 0.29% on average, while the rest of the market cut rates by 0.24% on average.
Most of the recent interest rate movements have been to fixed products, such as the below reductions from the big four banks:
Fixed interest rate home loans for both owner-occupiers and investors reduced by an average of 0.46%.
Many smaller lenders have also gotten onboard with rate cuts, some passing on March’s full 0.25pts interest rate reduction.
Smaller lenders such as Bankwest, Firstmac and ING are all among the many who have cut rates.
Whether you’re looking to purchase a property or refinance an existing home loan, it’s worth speaking to an experienced mortgage expert.
Homeloanscomparison.com.au‘s cost and obligation-free service can help you find a competitive home loan from a panel of 25+ trusted lenders, which you may have otherwise not known about. If we have potential home loan options for you, you’ll be connected to one of our experienced mortgage brokers, who can negotiate with the lenders and save you time by assisting with the paperwork.
Step 1. Select your state below.
Step 2. After answering a few questions, you’ll be given possible home loan options to start comparing straight away and see if you can potentially save on your mortgage.
An eChoice home loan expert will be in touch with you shortly.