For the 3rd time in five months the Reserve Bank of Australia has decided to reduce the official cash rate, this time to 0.75%, in a concentrated effort to boost the economy.
In making the decision to lower rates again the RBA has strongly reinforced its focus on supporting employment growth and boosting household consumption to restore inflation to within its target range of 2 -3% pa.
The RBA will also have been very conscious of the impact on Australia's exchange rate and the competitiveness of our exports had it not reduced rates in line with global trends.
Here is a table showing how Australia's average mortgage sizes may be affected:
|Loan Amount Examples||Likely decrease in repayments|
|$150,000||$21.45 per month|
|$250,000||$35.75 per month|
|$350,000||$50.05 per month|
|$450,000||$64.35 per month|
|$550,000||$78.65 per month|
|$650,000||$92.95 per month|
Lenders review rates independently of the RBA but will be under heavy political pressure to pass the rate reduction on. Some may choose not to pass the full cut on so it is therefore important to review your lending options regularly to ensure they remain the most suitable for your situation.
There may be different rates available from our wide panel of lenders and I'm always available to ensure you have the right financial solution for your current and future circumstances.
Peta, if you'd like to have a chat about what today's news means for you and your finances, please don't hesitate to get in touch.