The anticipation is mounting as Australians await the Reserve Bank of Australia’s (RBA) decision on the cash rate for October 2023. In the midst of economic uncertainty and global inflation trends, Home Loan Experts CEO Alan Hemmings, and Senior Mortgage Broker Jonathan Preston have shared their insights and predictions on what to expect.

Steady As She Goes

With a keen eye on the economic landscape, Hemmings predicts that the RBA will maintain the current cash rate in October 2023. He bases this prediction on the cautious stance central banks worldwide have adopted. He observes that in recent weeks, these banks have opted to keep their interest rates unchanged. Hemmings believes the RBA will follow suit, explaining, “Inflation is showing signs of improvement globally, which reduces the urgency to increase the cash rate. I expect the RBA to continue to monitor the situation closely.” Preston shares this sentiment, stating, “I think a rate hike is unlikely at this moment.”

Hike On The Horizon?

Preston acknowledges, however, that a rate hike is not entirely off the table. He points to the possibility of a higher monthly Consumer Price Index (CPI) figure in the near future, driven by soaring oil prices and skyrocketing rents. Preston cautions that if such an event occurs, it might prompt a rate hike, potentially unsettling market sentiment. “A rate hike, if it happens, could discourage potential buyers,” he notes.

What It Means for Customers

For homeowners and borrowers, Hemmings’ prediction offers a reassuring outlook for the coming month. Hemmings emphasises, “For customers, this decision translates into certainty for yet another month, offering the comfort of knowing that their loan repayments will remain stable unless they have a fixed-rate loan nearing expiration. For prospective purchasers, it is certainty about how much they can borrow, also a bit more encouragement to enter the market, knowing we may be near the top of the interest rate cycle.”

What’s Ahead

Looking beyond the immediate horizon, Hemmings provides a thoughtful perspective on the RBA’s future actions. He notes, “Unless there is a shock to the system and inflation starts heading in the wrong direction, I think the Reserve Bank will hold for some time on changing the cash rate. If inflation continues to improve, the need to increase rates will be reduced. However, we are already seeing property prices increase in the two largest markets, the Reserve Bank will be nervous about decreasing the cash rate and overheating the market.” As the RBA’s decision date draws nearer, we are committed to monitoring the ever-evolving economic landscape. Our goal is to keep homeowners and potential buyers well-informed about the changing financial environment, ensuring that everyone can navigate the uncertain waters of today’s economic climate with confidence. At Home Loan Experts, we care about how the cash rate decision can affect you. We’re here to help. Call us on 1300 889 743 or complete our free online assessment form.