The official cash rate was slashed by a quarter of a percentage to 2.25% this week and some banks and major lenders have already started passing on the drop with massively reduced fixed and variable rates.
At the Reserve Bank of Australia’s (RBA) monetary policy decision meeting on Tuesday, the board decided to drop the cash rate to the new historic low due to concerns over Australia’s stifled economic growth. The cash rate had previously remained unchanged at 2.50% since August 2013.
RBA Governor Glenn Stevens said Australia’s below trend growth over the next few quarters was a result of a slow down in investment in the resources sector and public spending, among other factors.
“Interest rates are very low and have continued to edge lower over the past year or so as competition to lend has increased…[and] dwelling prices have continued to rise,” he said.
So what does this mean for you as a borrower?
Well, since the announcement, a number of major banks and lenders have already announced significantly reduced interest rates for both their fixed and variable home loans.
This is great news for borrowers!
Although more rate cuts may be announced in the coming few days, there’s no telling when the RBA will lift the cash rate again. Have you considered whether you’re in a position to speak to a mortgage broker about refinancing?
Similarly, if you’re a first time buyer trying to crack Australia’s rising property market, speak to us today.
Our expert brokers have special relationships with a number of banks so, depending on your financial situation, we may even be able to get you a discounted interested rate that’s way below the bank’s Standard Variable Rate
Call us today on 1300 889 743 or complete our free assessment form to find out how we can help you get a great deal in a low interest rate environment.