Rates remain unchanged for the 9th consecutive month.
At its meeting today, the Reserve Bank of Australia Board left the cash rate unchanged at 2.5 per cent.
The reasons for the continued stability in interest rates include, but are not limited to:
- Growth in the global economy being slightly below trend from 2013.
- Financial conditions overall have remained at an accommodating level, meaning long term interest rates will continue to remain low.
- Financial institutions in the equity and credit markes remain in a position where they are still able to provide adequate funding.
- Moderate growth is occurring in consumer demand.
- A strong expansion in housing construction.
What does this mean for interest rates at your bank
Interest rates are currently very low, and savers are continuing to look for higher returns in response to low rates on safe investments. As a result, it is expected that lenders will keep their rates low and steady, in line with the RBA's actions.
By keeping the interest rates steady, sustainable growth in demand and inflation is enabled, fnot only for the economy, but for the lenders too.
What about housing prices
Housing prices have increased significantly over the past year, however this has not prevented people buying, as the numbers of home loans being written has increased slightly in response to the demand for housing.
Low interest rates resulting in competitive loan products, should provide support to demand, and help growth in the economy to strengthen over time.
With the RBA's economy targets in mind, experts are continuing to expect that interest rates will remain as they are for a while longer yet.
For more information on this article: see the full RBA media release here:
or at : http://www.rba.gov.au/media-releases/2014/mr-14-07.html
What should you do with your loan
If you would like more information on how the RBA's rate decision effects you, to see if there is a better home loan product out ther for you, or to fix your loan while rates remain low,
contact Stuart Pullar today on 3366 9982
or email him directly at email@example.com.