RBA’s Latest Interest Rate Cuts Record Low in 40 Years
Australian consumers got a late Christmas present when the Reserve Bank of Australia took interest rates to record lows. Interest rates were cut by 0.25%. The move came as a surprise to some when paired with falling oil prices. The key interest rate now sits at 2.25%, an all-time low.
The interest rate cuts are a move to help give the slowing economy a boost. Australia’s unemployment rate reached a record high for the last 12 years at 6.3%, while the quarterly growth revealed lower than expected numbers in December.
The reduced rates are designed to encourage consumer spending and give a boost to the business sector. Potential homeowners who may have been reluctant to take out a mortgage in the past are now looking at some of the cheapest home loans in history. In addition, business owners may see a boost as business credit becomes more affordable as well.
More Interest Rate Cuts To Follow
In a statement released by the Reserve Bank of Australia, Governor Glenn Stevens said that according to the recent information and updated forecasts, the Board had judged a further reduction should be appropriate. This can add further support to demand and foster sustainable growth.
The worth of the Australian dollar will likely decline as a result of the interest rate cuts. This decline could benefit business owners who ship overseas, but could also result in price increases for imported goods. Some credit card rates could be impacted, though many of these cards do not fall under the actions of the mandated rates.
Residents most likely to be impacted by these interest rate changes are those with current mortgages and those planning on purchasing a home in the next several months. Some experts project that further cuts are possible, or even likely, during the second half of the year.
Great News For Home Owners
Many banks have already implemented the reduced rates and others are expected to follow suit. Currently two of the four largest banks, Commonwealth Bank and Westpac, have already implemented lower rates. It’s only a matter of time for other banks to follow suit.
New home owners and existing home owners will enjoy this opportunity when they apply for home loans from now on. NSW Mortgage Corp will offer similar rates for our products on offer, such as home loans, second mortgages, property investment loans and so on. And with us, applicants don’t need to worry about collecting all the documents that banks usually request, we work with minimal documentation to approve your loan applications.