As APRA tightens the rules on property investment lending, the Reserve Bank of Australia has decided to keep the official cash rate on hold at 2.0 per cent during its August meeting today.
The news was widely expected by analysts as the RBA waits for business and consumer confidence to improve following its rate cuts in February and May this year. With the Australian dollar at more acceptable levels, the RBA is taking a wait-and-see attitude to see if the economy lifts before it decides to shift rates again, with many analysts speculating about the possibility of further rate cuts later this year.
As a result of APRA's increased supervision, the big 4 banks have already moved to increase interest rates on property investment loans. We expect that many other lenders will also be increasing their rates in the coming weeks, with rises varying between 25 and 50 basis points depending on the lender.
Even though there have been some rate rises and restrictions on property investment loans, rates are still great and other home loan rates are still at all-time lows. It's a good time to be in the property market - whether you're looking to invest, refinance, buy your first home or are opting for a sea change.
We're here to help you get the very best loan available for your personal financial situation and goals, so please give us a call today. We're also happy to help if you have any questions about APRA's increased levels of supervision on mortgage lending.