Interest Rates Frozen at 1.5% for October

Well the RBA met today and adopted the same approach as the recent Perth weather, freezing the cash rate at 1.5%.

When taking into account all the recent economic data it doesn’t really come as much of surprise. The Australian economy has been tracking along quite nicely of late. Business sentiment remains relatively robust, as does consumer confidence and the property market.

As a result, there has been no need for the Reserve Bank to re-think their current stance on monetary policy. Data from CoreLogic shows property prices continue to rise across most markets apart from Perth, and especially the Scarborough and Osborne Park area where we have seen decreases in current house prices making for some great bargains.

While the level of property price growth has started to slow in recent months, it continues to track upwards year on year, reflecting the ongoing strength of the property market.

Data from the Australian Bureau of Statistics also shows home loan demand remains at historical highs, with more than $30 billion worth of home loans approved over the month of July. The Reserve Bank would be keen to see how this year’s rate cuts play out in the market before making any further adjustments to the current monetary policy setting. 

Of course, while the Board has made the decision to leave the cash rate untouched this month, future rate cuts this calendar year cannot be ruled out. Depending on what happens both domestically and internationally, we could see the Reserve Bank cut the cash rate at least once more this year.

Regardless of what happens over the next few months, it’s important for buyers and owners to remember that interest rates continue to sit at historical lows.

If you have been thinking about buying, now could be the perfect time to do so. The cost of borrowing has never been more affordable, which is great news for home buyers and property investors alike.

Alternatively, if you already own property and have been in the same home loan for a while, now is the best time to review your current situation and make sure you are still in the right product for your needs. Borrowers may find there is a better and cheaper product on the market that could help them to save thousands of dollars over the life of their loan.

If you want to learn more about your home loan options, call me on 0438211745 or visit www.mortgagechoice.com.au/jason.coviello. Or if you'd rather be social about it, feel free to get in touch via my Facebook page: Jason Coviello - Mortgage Choice Scarborough & Osborne Park

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