04 Jun What the RBA cash rate cut means for Get Real clients
The RBA announced today that they have dropped the cash rate 0.25 percentage points from 1.5 to 1.25 percent. Given that this is the RBA’s first rate change in almost three years, it’s an important one for Get Real Finance and our clients.
While economists debate the impact this rate cut will have on the economy more broadly, we are going to break it down to explain exactly what this means for you.
To put it simply, the rate drop means that those with an existing mortgage on a variable rate can potentially reduce the repayments. This is because major lenders tend to reduce interest rates to reflect the RBA’s cut to the cash rate.
Ernst & Young’s chief economist Jo Masters was recently quoted stating, “historically, we know it [a rate cut] does tend to put a little bit of fire under the housing market. We’ve seen it before when they cut rates in previous housing cycles. It seems likely the banks will pass on a rate cut.”
This prediction seems to be coming true.
We saw the first signs of interest rates lowering in mid-April, when one lender announced that their new-to-bank 3- year fixed rate for home loans had dropped to 3.49% p.a. Later in April, another lender announced a similar product at 3.39% p.a. Over the weekend we have also heard of a community lender announcing a discounted 1-year fixed rate of 2.99% p.a.
Our brokers here at Get Real Finance have also noticed a price war waging between both major and minor lenders in recent weeks.
Particularly, 2- and 3-year fixed rates have been very competitive, with current 3-year fixed interest rates coming in as low as 3.39% p.a.
The rapid pace of interest rate changes amongst lenders is one of the reasons why it is beneficial to see a broker to find the most suitable rate and loan for you. Right now is a great time to check your interest rate, or better yet, let us check it for you! And if you are looking to join the market what better way to start then at historically low interest rates.
To organise a meeting with the Get Real Finance team and capitalise on lower interest rates, please use the Apply Now button at the top of this page or call our office on 07 3852 5755.