Share market spiral sparks further interest rate cut
Late in May, market experts didn’t even expect an interest rate cut at this month’s RBA meeting but after the poor performance of the share market recently, punters started predicting a cut and they were right.
Given the recent domestic and global financial statistics being reported, combined with the poor performing share market over the weekend, a 0.25% rate cute has not come as a surprise.
Some industry spectators were actually tipping another 0.5% rate cut, on the back of May’s 0.5% cut but a 0.25% rate reduction will bring relief to struggling Australian households.
The idea behind an interest rate cut is to inject some much needed consumer confidence back into the market and stimulate retail spending, which has a positive overall impact on our economy.
For the average mortgage holder, and soon to be mortgage holder, this could and should be great news.
We say could and should as the reality will only be felt once the banks and lenders make their move with their rates. Will they pass on the full amount of this cut?
It’s not likely that most banks and lenders will pass on the full interest rate cut this time round although there is the potential for some banks to use it as a competitive marketing tool.
Don’t be fooled by all the discussions about interest rate cuts – the interest rate is only one component to your mortgage solution and there’s more to the picture than the rate, such as terms and conditions.
With market commentary that the housing market has well and truly bottomed out and is now back on the rise – albeit slowly for now – one can be, and should be, optimistic about the economy and where we’re headed.
Not sure what to do about your interest rates, whether you’re looking at a new loan or want to refinance, speak to an award winning, qualified professional at Choice Home Loans. firstname.lastname@example.org or call 1300 2 CHOICE
How do you feel about your mortgage at the moment? Does the interest rate cut boost your confidence?