Investing,Mortgages & Loans,Personal Finance,Property

Rates are on hold, what does that mean for you in 2015?

9 Dec , 2014  

Adam Williams
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Adam Williams

Mortgage Broker at Help Me Choose
Adam boasts extensive experience in home and investment funding – he specialises in structuring finances to meet his clients’ needs and doesn’t adopt a ‘one size fits all’ theory. Additionally, Adam always seeks to look outside the square in order to maximise his clients’ savings.
Adam Williams
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Chances are, by now, you would’ve caught wind of The Reserve Bank of Australia’s decision to once again leave rates on-hold.

At the conclusion of its November Board meeting, Reserve Bank governor Glenn Stevens confirmed the cash rate would remain unchanged at 2.5 per cent.

“The most prudent course is likely to be a period of stability in interest rates,” Mr Stevens said.

As always, there’s been a lot of talk in the lead up to and since the RBA’s final announcement for 2014. While most bank-based economists are claiming that the RBA’s next likely move will be to increase interest rates, there’s also been word that the RBA could be forced to cut interest rates due to a poor Australian and global economy.

While we can continue to speculate about a range of possible occurrences (will the official cash rate remain steady until mid-2015 or is it realistic to believe that the cash rate could drop below 2 per cent?), let’s focus on what we do know.

The RBA’s decision to place interest rates on-hold has been made due to the weak economy, high unemployment levels, and inflation figures.

But while the Reserve Bank’s decision to leave the official cash rate on hold at its lowest ever level for 16 months would imply that the Australian economy is not as rock solid as we would like, the low rates can also benefit potential buyers.

Indeed, with rates still on-hold and set to stay this way at least for the short-term, if you’re looking to buy a property, now might just be the perfect time to jump onto the property ladder.

If you’re new to the property market, it’s important to realise how the official cash rate (OCR) impacts your loan. The OCR significantly influences how Australia’s lenders price their home loans. With the exception of January, the RBA board meets on a monthly basis to decide whether the cash rate will be increased, decreased or remain the same.

Now that the board won’t be meeting again until February, 2015, you can rest assured that interest rates will remain low until at least then. And that’s exactly why you’ll hear mortgage brokers like myself encouraging people to jump onto the property ladder if doing so has been a consideration for quite some time.

Alternatively, now’s also a great time for those with a mortgage to review their current home loan situation to see whether or not there is a better deal out there for their specific needs.

There’s no doubt that today’s market can be a complex one and rather daunting for those trying to navigate their way through the many options. If you need help, you’ve got nothing to lose by seeking out an experienced mortgage broker such as myself. Click below to get you mortgage questions answered! It is that easy!

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