December 02, 2014
The Reserve Bank of Australia has once again left rates on hold, meaning the official cash rate has not changed once throughout the course of the year.
At its Board meeting earlier today, the Reserve Bank said poor consumer sentiment teamed with sluggish business confidence was enough to warrant leaving the cash rate on hold at 2.5 per cent.
This is the 16th consecutive month that the cash rate has been left on hold.
Mortgage Choice spokesperson Jessica Darnbrough said while the Reserve Bank indicated last week that it is in a position to cut interest rates again, the Board has obviously decided to err on the side of caution and leave the cash rate untouched this month.
“It would appear that the Reserve Bank believes a further rate cut is not necessary at this time,” she said.
“According to National Australia Bank's latest Monthly Business Survey, business conditions jumped in October, marking the largest monthly increase in the history of the survey.
“But while business conditions were good, business confidence suffered a further fall in October suggesting firms remain uncertain over the near-term demand in their industry.
“At the same time, the Melbourne Index of Consumer Sentiment rose by just 1.9% in November to 96.6, meaning pessimists continues to outweigh the number of optimists – a fact the Reserve Bank is acutely aware of.
“So while some areas of the economy are improving, others are struggling and the Reserve Bank feels as though the best course of action is to leave rates on hold.”
Moving forward, Ms Darnbrough said with rates still on hold and set to stay this way for the short term, now may be a great time for potential property buyers to jump onto the property ladder.
Alternatively, now is also be a good time for those with a mortgage to review their current home loan situation and see whether or not there is a better deal out there for their needs.
“Australia's lenders are competing aggressively for business at the moment, so if you haven't refinanced or reviewed your mortgage in recent years, now may be a great time to do so,” she said.
If you want to learn more about your home loan options, call 13 77 62.