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.