At its first meeting for 2018, the Reserve Bank of Australia (RBA) decided to leave the official cash rate unchanged at 1.5 percent. What does this mean for interest rates?
With the latest Australian Bureau of Statistics' consumer price inflation report (CPI) coming in below expectations last week, few analysts think the economy will improve enough to see any interest rate increases from the RBA this year.
According to some analysts, the RBA won't increase rates until the inflation rate has gone up quite a bit - probably not until June 2019.
Some lenders cut rates on their fixed rate owner-occupier loans in January. There were also some very competitive deals released for principal and interest investment loans. Contact us if you'd like to know more.
With the RBA unlikely to make changes to the cash rate anytime soon, lenders will continue to make their own interest rate adjustments throughout the year. Please stay in touch and we'll help you stay on top of any changes from your lender, or news from the property market in your area.
At its final meeting for 2017, the Reserve Bank of Australia (RBA) decided to keep the official cash rate unchanged at 1.5 per cent. The RBA next meets in February 2018.
The good interest rate news for property owners and buyers looks set to continue into 2018. In its Statement on Monetary Policy released in mid-November, the RBA indicated that:
At its November meeting today, the Reserve Bank of Australia has kept the official cash rate unchanged at 1.5 per cent for the 15th consecutive month!
What else is happening in our markets?
Future rate movements: Some analysts are speculating we will see our next rate cut in 2018, following recent declines in auction clearance rates, and indications of overseas investors withdrawing from the market.
Interest only loans: Figures released last month revealed our major banks cut back interest only lending by $4.5B over the past year. We know which lenders are still offering these loans, and which ones have the most competitive rates, so get in touch if you need help locating the right product for your needs.
Owner occupier loans: There are some very competitive rates available for those looking to buy their own home right now. Some lenders are also offering special deals to encourage first home buyers to get into the market. Talk to us if you’re looking to put a foot on the property ladder this spring – we’d love to help!
Property market activity: In the last week of October, the combined capital cities saw the number of auctions reach a new year-to-date high, with a total of 3,690! There are plenty of properties available, so please contact us now to arrange pre-approval on your loan.
At its October meeting, the Reserve Bank of Australia has again opted to keep the official cash rate unchanged at 1.5 per cent. Economists widely anticipated the RBA’s decision, with many predicting no further RBA rate changes until next year.
What else is happening in the loan market?
Interest only loans: There has been a significant reduction in the number of interest-only loans taken out by borrowers in recent months. This is a result of banks responding to regulatory tightening by APRA. If you need an interest-only loan, talk to us as we know which lenders are still offering these loans.
Fixed interest loans: With interest rates at historical lows, fixed rate loans are becoming increasingly popular. If you’re interested in fixing your rate, it could be a good time to talk with us about how this option could work for you.
At its September meeting, the Reserve Bank of Australia chose to keep the official cash rate on hold at 1.5 per cent. How will this affect you this Spring?
Despite the RBA keeping the cash rate unchanged, lenders continued to cut rates on principal and interest loans for owner occupiers during August. Home loan rates are still very low and that means Spring could be the time for a fresh start in a new home!
Property investors are facing interest rate uncertainty as many lenders make adjustments to ensure they are meeting APRA’s lending guidelines. However, there are some lenders who have cut interest rates for new investors seeking principal and interest loans in recent weeks, so talk to us if you’re looking to invest in property.
Spring could also be the time for a home loan health check, so call us now to get it organised! We’re here to compare the market and find you the most suitable loan for your needs. Please get in touch today, we’d love to hear from you.
At its August meeting, the Reserve Bank of Australia chose to keep the official cash rate on hold at 1.5 per cent. How will this news affect your situation?
With no cash rate movement from the RBA, interest rates remain competitive so it could be a good time to purchase a home, investment property or to refinance. Lenders are continuing to make rate moves to encourage interest-only borrowers to switch to principal and interest loans, so call us if you want to find out more.
The Australian dollar soared after last month’s RBA announcement, following media speculation the RBA would like to raise interest rates to 3.5 per cent. However, comments from the RBA indicate it’s unlikely there will be any cash rate movements until late next year
At its July meeting, the Reserve Bank of Australia chose to keep the official cash rate on hold at 1.5 per cent. What this means for you?
Even though the official cash rate remains unchanged, lenders continue to make interest rate moves. Last month, the big four banks increased rates on interest-only loans and at the same time, cut rates on principal and interest loans, particularly for owner occupiers.
These rate adjustments were designed to encourage borrowers to switch to principal and interest loans to pay down their debt while interest rates are still low. The changes followed an earlier crackdown by the Australian Prudential Regulatory Authority (APRA) with regard to interest-only lending.
The new financial year has arrived and it’s a great time to review your home loan. With so many changes happening, it’s extremely important to check your interest rate and loan features at least every 12 months.
Duty and Grant Changes for First Home Buyers in Victoria - summary
a. The grant amount remains unchanged at $10k for new builds and Off the Plan Purchases for first home buyers up to $750k purchase.
b. Grant has been increased to $20k for buyers purchasing in Regional Victoria.
c. NO Stamp Duty for first home buyers upto $600k purchase, then a taper rate applies upto $750k.
d. Stamp Duty concessions for investors purchasing off the plan has been removed.
The above is in effect from 01/07/2017 - Happy New Financial Year!!
At its June meeting, the Reserve Bank of Australia chose to keep the official cash rate on hold at an historic low of 1.5 per cent.
With the cash rate on hold, interest rates are likely to remain low and lenders will continue to offer competitive deals for those looking to purchase a home, an investment property or refinance.
We also wanted to let you know that last month’s Federal Budget announced new measures that may affect you and future interest rates, including:
What are they and Why?
The Australian Prudential Regulation Authority (APRA) who oversees and regulates banks have placed restrictions to investor lending and have tightened this space.
Their concern is that property investment lending is doubling its growth each year against the advisable growth. APRA is concerned by the significant growth in the number of investment loans and advised lenders they need to take action to limit it.
In response, lenders are tightening their lending criteria for investment borrowers.
Some of the changes include:
Reducing the maximum loan-to-valuation (LVR) ratio for new investment loans
Removing interest rate discounts offered on new investment loans
Changing the qualifying criteria for new investors
Increasing the loading buffers that apply to serviceability assessments (this has the effect of reducing maximum borrowing capacities)
Requesting additional documentation from borrowers when they apply for new investment loans
Some lenders will move to Increase existing interest only investment home loans
Tightening restrictions around lending to self-managed super funds
Capping investment interest only loans whereby a client would need 20% deposit or equity in another property.
Some lenders are intending to increase their existing investment loan interest rates slightly.
If you would like further clarification on the above and to understand how this change may affect you, please feel free to give us a call or message. We are more than happy to assist.
We still have some lenders on panel who will lend up to 95% for investor loans.