May 06, 2015
Borrowers have been given reason to celebrate, with the Reserve Bank of Australia cutting the official cash rate to the new historical low of just 2 per cent.
At its Board meeting earlier today, the Reserve Bank announced it would cut 25 basis points off the cash rate, marking the second rate cut of the year.
Local Mortgage Choice mortgage broker Nathan Bottrell said the sluggish pace of Australia’s economic rebalancing ultimately encouraged the Reserve Bank to take action and trim the cash rate.
“Recent economic data suggests the first rate cut has failed to have the desired impact, with consumer sentiment falling sharply in April,” he said.
“The Westpac Melbourne Institute of Consumer Sentiment Index declined by 3.2 per cent over the month of April to just 96.2, meaning pessimists outweigh the number of optimists.
“With the Federal Budget set to be released later this month, the Reserve Bank may have trimmed the cash rate to give consumer sentiment a boost ahead of the Budget announcement.”
Last year, consumer sentiment plummeted 6.8% in the aftermath of the Budget and remained weak for the rest of the calendar year.
“Furthermore, the rising Australian dollar would no doubt have given the Reserve Bank room for concern at today’s Board meeting,” Mr Bottrell said.
Regardless of the reasons behind the rate cut, Mr Bottrell said the decision to trim the official cash rate should spell good news for homeowners.
“If February’s rate cut is anything to go by, borrowers can expect their lender to pass the RBA’s latest rate cut on, taking home loan rates to new lows,” he said.
“This opens up a great opportunity for home owners and potential home buyers alike. If you have been in the same mortgage for the last few years, you may find there is another product that is not only cheaper, but more suitable to your needs. Alternatively, if you are looking to get onto the property ladder in the not-too-distant future, now may be a great time to do just that.”
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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.
Recent recognition: 2014 Australian Broking Awards Best Diversified Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.
Visit www.mortgagechoice.com.au or call customer service on 13 77 62.