Invest
Borrowers alerted: The home loan market is set to change
In light of today’s cash rate call, Australian borrowers are being told “it’s no longer reasonable” to assume factors which have previously driven interest rates will continue to do so.
Borrowers alerted: The home loan market is set to change
In light of today’s cash rate call, Australian borrowers are being told “it’s no longer reasonable” to assume factors which have previously driven interest rates will continue to do so.
The Reserve Bank announced today that the official cash rate will remain on hold for the month of March, making it the 30th consecutive month the cash rate has been unchanged.
Economists are now predicting that a cash rate cut will be the central bank’s next move.
As such, aggregators like Mortgage Choice are telling borrowers they shouldn’t use the official cash rate as an absolute indicator of what their home loan interest rates will be.
“Where borrowers are concerned, it is no longer reasonable to assume that changes in the cash rate, or lack thereof, will drive home loan interest rates,” said Susan Mitchell, chief executive officer at Mortgage Choice.
“At a Standing Committee on Economics in February, RBA governor Lowe highlighted the importance of borrowers seeking a better deal on their home loan, drawing attention to the discounts on headline interest rates that lenders are willing to give borrowers,” she said.
“Interest rates are constantly changing and the rates you see advertised can be significantly higher than the rate you could secure.”
Why the RBA kept rates on hold
For Mortgage Choice, a variety of factors contributed to today’s cash rate call.
“In the United States, the Federal Reserve made the decision to hold the Federal Funds Rate at 2.25–2.50 per cent at its last monetary policy meeting. Factors such as a slowdown of the US economy and global political uncertainty may be encouraging a cautious approach from the Fed,” Ms Mitchell said.
“While at home, RBA board members are paying close attention to the nation’s housing market activity and have lowered their outlook for dwelling investment. In the minutes of the RBA board’s previous monetary policy meeting, members noted the fall in demand for home loans, particularly among property investors.”
In addition, factors such as Australia’s lacklustre inflation rate would’ve played a part in the RBA’s decision. Recent data indicates the headline inflation rate is 1.8 per cent.
RELATED ARTICLES
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
