RBA Rate Hold Enters 8th Month
At its third meeting of 2014 the Reserve Bank of Australia (RBA) announced the cash rate will remain at 2.50 per cent for the eighth consecutive month.
Loan Market director Mark De Martino said that consumers would continue to benefit from low interest rates and suggested those looking to purchase should take a hard look at getting into the market while rates were at a record low.
“With the Aussie dollar surging back to 92 cents this week, we may start to see increasing speculation that the RBA will have to lift rates to protect the economy,” Mr De Martino said.
Mr De Martino said that lenders were responding to the rate inactivity with a variety of incentives to attract new customers and the competition in the fixed rate space was particularly rivalrous.
“We’ve got lenders moving fixed rates in opposite directions, offering cash back incentives for switching and putting forward honeymoon rates that are well below what we normally see,” he said.
Mr De Martino suggested that consumers looking at taking up a fixed rate take a hard look at some of the products on offer right now.
“If we’re not at the bottom of the rate cycle, we’re pretty close. There’s not much more room to go down. If you’re tossing up the idea of fixed or variable you should ask yourself if you think the current variable rates will average what your fixed rate would over the term of the loan,” Mr De Martino said.Tags: Fixed Rate, home loans, Mark De Martino, mortgage, RBA