The best reason to be on hold

Usually being on hold is considered a bad thing, but in terms of interest rates, it’s a good thing for mortgage holders when they’re at the lowest level since the 1950’s.

After announcing an interest rate cut last month, the Reserve Bank of Australia (RBA) has decided to hold the current interest rate at 2.25 per cent for a wait and see strategy.

While the RBA takes stock of the interest rate cut, many industry spectators are already hinting towards a further cut over the coming months.

The Sydney Morning Herald reported that Australia and New Zealand Banking group chief economist Warren Hogan said the RBA would probably cut the cash rate again in April.

"A sustained non-mining recovery remains elusive, dependent on new investment outside of the property and construction sectors," he said.

"Over the medium term, the currency is critical and there is little evidence that it is having the desired positive impact on investment decisions and employment as yet."

Westpac's Mr Evans also tipped an April cut, although he didn't discount a move in May.

"On the analysis ... and our own assessment of the economic situation we expect that a follow-up move can be confidently anticipated in April [or] May with a bias for April." he said.

Use the Choice Home Loans online tools to calculate your repayments or chat to them directly at info@choiceloans.com.au or call 1300 2 CHOICE.

 

 



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