In case you didn’t hear the good news, the Reserve Bank of Australia has decided to leave the cash rate on hold at a record low of 2.75 per cent. In a statement provided by RBA governor Glenn Stevens, the falling Australian dollar was cited as the main reason behind their decision.
The implications for home owners
If you’re a homeowner, you might breathe a sigh of relief that bank interest rates will also remain the same. In fact, it’s been suggested that interest rates will decrease over the course of the short term – to help our economy adjust to falling levels of mining investment and to help make property purchasing a more affordable option.
JP Morgan economist Tom Kennedy cited that the high Australian dollar was crucial to the RBA's last cash rate cut in May. He went on to say he expects the RBA's next interest rate cut to be in November, followed by another in February 2014. Either way, it will depend on the performance of the Australian dollar and the impact on consumer prices.
Check with your mortgage provider
We recommend that you touch base with your mortgage provider and check whether the interest rate on your mortgage has changed or remained the same. It’s always good practice to keep on top of your interest levels - to ensure you’re getting the best deal possible from your lender and to help you keep abreast of your financial obligations.