For the seventh consecutive month, the Reserve Bank of Australia has decided to leave the official cash rate on hold.
Mortgage Choice franchisee Rhye Livingstone said the decision was “expected”.
In recent weeks, the Reserve Bank of Australia’s governor, Philip Lowe, has made it clear that future cuts to the cash rate are now more unlikely than likely,” he said.
“In his opening statement to the House of Representatives Standing Committee on Economics, Mr Lowe suggested that the current monetary policy setting remained appropriate for achieving sustainable growth in the economy.
“And he certainly seems to be right, with recent data suggesting the Australian economy is tracking along quite well.”
Economic growth rebounded strongly in the December quarter, smashing economist expectations.
Gross Domestic Product rose 1.1% from the September quarter, beating the anticipated 0.8% rise.
In addition, consumer sentiment rebounded slightly in February. According to the Westpac Melbourne Institute Index of Consumer Sentiment, confidence climbed 2.3% throughout the month.
Meanwhile, research conducted by CoreLogic found property values rose by 1.4% across the combined capital cities over the month of February.
“Sydney was once again the standout performer, with median values climbing 2.6% across the capital city throughout the month,” Mr Livingstone said.
“From this data we can see that the Australian economy is tracking along quite nicely at the moment, so it wasn’t surprising to see the Reserve Bank opt to leave the cash rate on hold for another month.”
But while the Board decided to leave the cash rate on hold once again, Mr Livingstone said the market is anything but stationary, with many of Australia’s lenders tweaking their pricing and policy in recent weeks.
“Over the last month, we have seen a number of lenders put additional restrictions on their investment lending, specifically on refinancing in this space,” he said.
“In addition, some lenders have lifted the rates across their suite of investment loans in a bid to curb activity in this area. In some instances, we have seen interest rates rise by as much as 25 basis points.
“More broadly, volatility in the global and domestic markets has put a lot of pressure on wholesale funding costs, which has forced some lenders to lift both their fixed and variable rates.”
Looking ahead, Mr Livingstone said he wouldn’t be surprised to see more lenders move their rates out of cycle with the Reserve Bank.
“Even if rates do continue to move north, it is important for all borrowers and potential buyers to understand that the cost of borrowing is still sitting at near historical lows,” he said.
“Now is still a great time to be a property buyer, investor or refinancer.
“Anyone who hasn’t reviewed their mortgage in more than 12 months, should take the time to speak to their local broker and make sure they are still in the right product for their needs.”
If you want to learn more about your home loan options, call 0459 958 893 or visit www.mortgagechoice.com.au/rhyelivingtone.
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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 advice, consider its appropriateness to your circumstances.
About Mortgage Choice
Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.
Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.
Since that time, the company has grown and developed into a fully fledged financial services provider.
Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.
Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.
Mortgage Choice 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).
Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.
Visit www.mortgagechoice.com.au or call customer service on 13 77 62.