June 04, 2013
Following the Reserve Bank of Australia's decision this month to leave the cash rate on hold at 2.75%, Mortgage Choice encourages Australian borrowers to review their finances and use the next few weeks to prepare themselves for the new financial year.
While the decision to leave the cash rate on hold would not appear to be a surprise to economists – with only one out of 25 surveyed by Bloomberg predicting a cut – Mortgage Choice spokesperson Belinda Williamson said Australians with a home loan should take the hold decision in their stride.
According to Ms Williamson, borrowers can view the rate hold as an encouraging sign ahead of the new financial year, as it indicates that the Reserve Bank of Australia is keeping a watchful eye on the positives emerging in the economy.
“Following last month's cash rate cut, and the culmination of previous cuts, we seem to be witnessing some positive signs in the economy. Indicators of this in the property market include improvements in housing finance commitments, building approvals and auction clearance rates. Plus, we are seeing the unemployment rate remain relatively steady, signs of life in retail sales and a fall in the Australian dollar, which should provide breathing space for many exporters and help lift business confidence,” said Ms Williamson.
“Keeping that all in mind, we want borrowers to also look out for the positives signs in their own personal finances. Where things might not look as rosy we would encourage people to make changes now to improve their financial situation so that they start the new financial year with a more optimistic outlook.
“There is likely to be another rate cut at some point this year but borrowers need not wait for this before making changes, particularly as the beginning of the next financial year, 1 July, is less than one month away. Borrowers should take advantage of this point in time and refresh their financial plans.
“Getting a regular health check on your home loan and other areas of your finances may be the key to ensuring you are better prepared for whatever may come your way.”
Mortgage Choice tips for preparing for the new financial year include:
- Review your plans, activities and financial commitments from the past year and create a diary of what will be repeated or changed in the year ahead. This will help you plan for what can be expected;
- Re-do your budget according to any recent changes to your financial circumstances, lifestyle and any plans, events or occasions expected over the next 12 months;
- Make sure you are continually educating yourself about the economic influences on the cash rate decision so you have an idea of when to expect possible home loan interest rate cuts or rises;
- If you have a home loan, make certain you have the most suitable loan for your needs over the coming year – get a free ‘home loan health check' through a reputable mortgage broker; and
- If you are saving for a deposit to buy property, ensure you have set a time limit and a realistic savings plan to stick to while having your goals firmly in mind.
For further information or to arrange an interview, please contact:
Mortgage Choice Corporate Affairs
(02) 8907 0472 / 0407 416 124
(02) 9018 8603 / 0412 550 004
This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances