Hello, and i hope this email finds you well!
The RBA has just announced another rate cut of 0.25% which drops the official cash rate to a historic low of just 1%.
In his statement today, RBA Governor Mr Lowe said the decision would “support employment growth and provide greater confidence that inflation will be consistent with the medium-term target”.
“The outlook for the global economy remains reasonable,” he said. “However, the uncertainty generated by the trade and technology disputes is affecting investment and means that the risks to the global economy are tilted to the downside.”
What remains to be seen is how much of the rate cut will be applied by the banks. We saw two of the major 4 banks like CBA & NAB pass on the full rate cut last month, as did AMP, Macquarie / Connective Home Loans Bankwest and ING Direct.
The hardest hit from this decision are those that rely on interest earned from savings accounts, as this rate will drop further too.
Have a good week everyone and may i suggest a tip - try not to lower your repayment to suit these two back to back interest rate cuts, instead try to pay as you were previously, at the earlier repayment amount (whilst enjoying lower interest rate charges).
Therefore - repayment could stay the same, interest charged is lower, home loan paid off quicker, more savings for you :)