After Governor Glenn Stevens said on the weekend that we should all just “chill out” regarding interest rates for the remainder of 2015, it was a pretty sure indication that the cash rate wouldn’t be shifting for the rest of the year. Everyone took the hint and the decision to leave interest rates on hold at 2% was widely expected.
In the past month, property prices in Sydney and Melbourne have both dropped, which indicates the markets down south are starting to cool – something that has concerned the Reserve Bank all year. Consumer sentiment rose in November and the board would be reluctant to do anything to disrupt this ahead of Christmas. According to the Westpac Melbourne Institute Index of Consumer Sentiment, confidence was up by 3.9% for November – levels we haven’t seen since January this year.
Elsewhere in the economy, things are also looking good. Moderate growth is still occurring despite declines in the mining sector. This, combined with positive indicators from global markets has given the RBA confidence. Many are speculating these conditions may lead to rate increases early next year, but speaking on this Governor Stevens has said the board will see what happens in the next two months and over Christmas.
The next meeting is in February and, in the meantime, home owners should stay on their toes. Some lenders have been lifting interest rates out of cycle, so shop around to see if there is a better mortgage available to match your needs. Consider the features of a home loan as well as the interest rates to see how the fees compare with interest rate savings. The market is very competitive at the moment and you may be surprised how far you can get by simply asking your lender for a better deal.