April 02, 2013
The decision this month to keep the cash rate on hold at 3% indicates that previous rate cuts by the Reserve Bank of Australia (RBA) are starting to flow through into positive consumer sentiment, according to national mortgage broker, Mortgage Choice.
Speaking about the RBA's decision, Head of Corporate Affairs, Belinda Williamson said that even though existing and potential property owners may be disappointed not to see a cut this month, she urges them to focus on their financial goals.
“With Easter just passed, we are more than one quarter of the way through the year. Existing and potential property owners shouldn't waste any time if they are to meet their annual financial goals, such as repaying their home loan sooner, buying their dream home or snapping up a sound investment property,” said Ms Williamson.
“There are plenty of encouraging signs in the economy that will likely continue throughout 2013. The low interest rate environment and the positive flow-on effect this is having on consumer sentiment saw the value of housing finance commitments in January rise 2.4% month on month, and 5.6% from January 2012.
“Despite the uncertainty in some overseas economies and the tapering off of the mining boom here, employment figures are strong and we have even seen a recent uptick in property prices, albeit small.”
Nonetheless, Ms Williamson urges consumers to keep a level head despite the steady cash rate.
“Let's not forget that the Reserve Bank has lowered the cash rate six times in the last 16 months, with the last rate cut announced in December 2012. The knock-on effect of the previous cuts may have been slower than the Bank had expected, but the fact that it has chosen to keep the cash rate on hold this month is a sign that it is starting to see these flow through to the economy and lift consumer confidence,” said Ms Williamson.
“There has even been some talk of the possibility of rates rising as early as next year, although the economy and consumer confidence would need to pick up significantly in the meantime.
“Even with rates on hold, mortgage holders and those looking to enter the property market still have the option to put their best bargaining hat on and to try and negotiate a better deal.
“Our tip is if you don't feel comfortable heading into the conversation with your lender, seek professional help from a mortgage broker, who has a good grasp on what discounts may be available and can negotiate with the lender on your behalf. There is no harm in asking!”
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 information, consider its appropriateness to your circumstances.