Homeowners will hopefully see some further savings in the coming months after the Reserve Bank of Australia (RBA) cut interest rates again to historically low levels. This week the RBA announced an interest rate cut to a record low of 0.1 percent, which comes after rates were held at 0.25% for more than 6 months.
What does this mean if you’re a homeowner?
With these changes, it’s a good time to shop around for a better deal. “We’ve entered into a historically low-interest-rate environment. If your home loan is with a lender that is passing on the interest rate cut, you are in a great position to get ahead on your repayments. If you’re not, now is the time to be shopping around for a better deal.”
What does it mean if you’re looking to buy?
Economists claim that if the interest rates are too high, house prices tend to be lower because people cannot afford to service their loans. With RBA’s recent rate cut, purchasers should have more borrowing power than ever before, plus we expect to see a boost in consumer confidence, which may stimulate more homes on the market.
“The great news for first home buyers is that they will be able to borrow more and there may be more to choose from as people gain more confidence in the market and list their homes for sale.”