At its final Board meeting for the year, the Reserve Bank of Australia decided to leave the official cash rate on hold at 1.5%.
The announcement was labelled “unsurprising” by economists who believed strong economic data would ultimately encourage the Board to stay firm on rates.
According to market analysts, robust consumer sentiment combined with strong business confidence and rising property prices provided the Reserve Bank with all the incentive it needed to leave the cash rate untouched.
The Westpac Melbourne Institute of Consumer Sentiment Index found optimists continue to outnumber pessimists, which is good news for the economy as a whole.
Meanwhile, data from the Australian Institute of Company Directors found businesses are also relatively optimistic, with one in three directors expecting to see a surge in investment and staffing next year.
Finally, the property market remains relatively robust, with data from CoreLogic showing property values across the combined capital cities rose 0.2% in November, taking values 9.3% higher over the last 12 months.
Given all of this, there was no urgent reason for the Reserve Bank to change their stance on monetary policy.
That said, as we head into the New Year, many economists believe we could see rates head north very soon.
In the last few weeks, long term bond rates have risen, while many of Australia's lenders have increased the interest they charge on their suite of fixed rate products.
When this happens, it is often not long before variable rates follow suit. So, if you are concerned about the future trajectory of your home loan, now may be the perfect time to review your options.
You may find there is a sharply priced fixed rate on the market that can best suit your individual circumstances.
If you're unsure about your next move, speak to a mortgage broker today.