It's the first interest rate announcement of the year from the Reserve Bank of Australia, and there has been an expectation in the air in recent weeks that the RBA will be slicing another 0.25% off the already record low cash rate of 2.50% in its meeting today.
Today's RBA decision:
In it's board meeting today, the RBA sliced the cash rate down to a new record low of 2.25%.
So why the cut?
Mortgage Choice's spokesperson Jessica Darnbrough said today that sluggish sentiment has twisted the RBA's hand, and, "last month’s disappointing consumer sentiment result combined with a recent spate of poor economic data ultimately forced the RBA to take action and cut the cash rate".
The full Mortgage Choice media release can be seen here.
Direct from the RBA:
The RBA also released their Media Release today, and as a brief summary, Glenn Stevens, the Governor of Monetary policy Decision at the RBA states,
"At its meeting today, the Board decided to lower the cash rate by 25 basis points to 2.25 per cent, effective 4 February 2015".
He goes on to explain that over the past 18 months while the cash rate has remained unchanged, the board has been assessing how the easing in policy that had already been put in place had taken effect. They were also monitoring Australian and abroad developments.
According to the RBA, this month's decision took into account updated forecasts and recent information that in order to balance these, "a further reduction in the cash rate was appropriate".
What for the future, and your home loan?
The RBA indicates that in order to "foster sustainable growth and inflation outcomes consistent with the target, the action of cutting the cash rate is expected to add some further support to demand".
That said, with this encouragement from the RBA, many Australian lenders may reduce rates accross their relevant home loan suites in the coming weeks. Only time will tell if they reduce their rates by the full 25 basis points however.
The outcome will most likely result in a new surge in demand of property buyers who are taking advantage once again of these new record low interest rates.
It's certainly a good time to have a chat with Daniel about your own home loan options, or if you are a first home buyer, taking that next step and jumping onto the property ladder while the going is good.
To see the full media release from the RBA, click on this link:
For more information on how Daniel Meade, your local Mortgage Choice Broker can help you find out what today's RBA interest rate decision means for you, please contact him on:
Phone 07 3833 9666,
Or simply click on the ‘contact us’ tab on this page.
This article is for general information purposes only and does not constitute specialist advice. It should not be relied upon for the purposes of entering into any legal or financial commitments. 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, and specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy.