August 06, 2013
6 August 2013
RBA decides to cut Official cash rate cut to 2.5% this month.
According to Mortgage Choice, the Reserve Bank of Australia had only two options this month in relation to the official cash rate – to keep rates on hold at 2.75% or cut them further.
“With the uncertainty of the current economic environment, the possibility of the cash rate rising was never an option,” said Bob Korver, local Mortgage Choice franchise owner.
“There has been a lot of discussion recently about the signs that would warrant a hold versus those that would permit a further cut.
“I don’t believe that a cash rate hold this month would have been out of place if you consider the signs of improvement in the economy that are showing. For instance, capital city house prices have risen by 3.5% in the last couple of months, housing finance commitments have been improving, and consumer confidence remains steady.
“However, the encouraging signs in the property market and consumer sentiment don’t appear to have been enough for the Reserve Bank to confidently rest on its laurels. The decision to cut rates again, in an attempt to further stimulate the economy, would have been made by also taking other economic factors into consideration.
“One factor that would have likely been a catalyst for a rate cut is shaky business confidence. There is concern that unemployment may rise if the gap left by the peak in mining investment is not filled by an increase in business investment in the non-mining sectors, including the property market.”
Mortgage Choice in Runcorn believes that in light of the cash rate cut, the message for homebuyers and investors is clear – while business confidence, unemployment concerns and even political uncertainties in relation to the upcoming election simmer, the bottom of the current property market cycle would appear to have past. This combined with low interest rates means buyers and sellers alike can look to capitalise.
“Now is a great time for clued-in and prepared buyers to consider entering the property market, to get in ahead of the rising trajectory of property prices and to take advantage of the historically low interest rates. At the same time, sellers should heed the cash rate cut as a signal to spruce-up their property now in the lead up to the spring selling season,” Bob said.
“The good news for those who already have a mortgage is that these currently low interest rates pose the perfect opportunity to repay their home loan faster and look to achieve their next financial goal sooner.”
If you want to learn more about your home loan options, call Bob and the team at Mortgage Choice in Runcorn on 07 3423 3202, Or log onto www.mortgagechoice.com.au/bob.korver
For further information or to arrange an interview, please contact:
Bob Korver Mortgage Choice Runcorn
0408 050 678
Important information 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. About Mortgage Choice Mortgage Choice has sourced a home loan for well over 350,000 people since 1992. It works with all manner of property finance borrowers via hundreds of franchises. The company writes one in every 25 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many of its brokers provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and providing referrals for risk and general insurances. Uniquely, Mortgage Choice pays its franchisees the same commission rate for home loans they write, regardless of rate paid by the lender a new customer selects, working in the customer’s best interests to tailor a solution to them. To cater to the growing needs of our customers, Mortgage Choice soft-launched in October 2012 its new financial planning business. Mortgage Choice Financial Planning will officially launch in FY14. The company has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA). Recent recognition: 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list. Mortgage Choice holds an Australian Credit Licence: no. 382869, issued by ASIC. Mortgage Choice Financial Planning Pty Limited, a fully owned subsidiary of Mortgage Choice, holds an Australian Financial Services License: no. 422854, issued by ASIC. Visit www.mortgagechoice.com.au or call customer service on 13 77 62.