Home owners may have been hoping for an early Christmas present in the form of a December interest rate cut, but the Reserve Bank had other ideas at its last meeting for 2017. The official cash rate may be on hold at the historic low of 1.50%, but some lenders have started to independently lift rates on fixed mortgages.
This sends a signal that the banks are confident interest rates will rise next year, though the economic outlook is still mixed. Inflation is below the target of between two and three percent, and overall employment growth has slowed.
In his statement after yesterday’s meeting, Governor Philip Lowe acknowledged low inflation rates, but was optimistic. "The continuing subdued growth in labour costs means that inflation is expected to remain low for some time, before returning to more normal levels," he said.
Overall the economy looks set to grow in the next 12 months as we recover from the decline in mining as well as a turbulent 2016 marked by Brexit and the US election.
Is now the time to fix your home loan?
With mounting speculation that interest rates could start rising next year, now might be the time to start reviewing your home loan. If you have a variable loan, you could consider fixing part of it to ensure you can take advantage of low interest rates while also accessing the flexible features of a variable mortgage.
The Reserve Bank is not meeting again until February, so it’s worth taking the time over Christmas and New Year to re-evaluate your home loan options.
Latest Brisbane property market stats
- Official cash rate: 1.50%
- Brisbane median house sale price: $665,500*
- Brisbane median unit sale price: $432,250*
- Auction clearance rate: 47%
- Interest rates starting from 3.74% p.a.
*These are the latest CoreLogic RP Data figures from October, 2016. They are based on sales data from the Brisbane City Council region only.