This increase has triggered concerns among homeowners across the nation, as they brace themselves for the impending rise in their cost of living. Among those most affected are individuals with mortgages carrying variable interest rates, who are feeling the financial strain as the lenders and banks adjust their financial products in response to this rate hike.
As previously indicated in their announcements, the RBA is committed to achieving a specific level of inflation to further stabilise our economy. This desired level of inflation is expected to contribute to higher employment rates nationwide and help stabilise the cost of infrastructure materials, particularly as supply and demand dynamics evolve in the wake of the global pandemic.
In an effort to make their household finances more manageable, mortgage holders are increasingly turning to their brokers to identify the most competitive refinancing opportunities available. It is essential to understand that securing the lowest interest rate does not necessarily translate to the lowest monthly repayment. This is due to other lending criteria that may be implemented; including establishment and maintenance fees, which can lead to higher interim repayments. Therefore, it is advisable to widen your search and consider various factors when attempting to control day-to-day expenses.
It is no secret that we should anticipate a further series of rate increases before the RBA deems inflation to be within their target range. This timeframe aligns with expectations of interest rate reductions in the United States and Europe, especially as these regions are also experiencing historically high inflation rates.
The RBA acknowledges that the current interest rates are not sustainable, and if maintained over an extended period, they could plunge the economy into a precarious state. The property market is projected to respond to rate changes approximately six months after a reduction in the cash rate. As a result, we can expect to see property prices decreasing around mid-2025, assuming that all predictions hold true.
If you’re seeking a personalised solution to manage your mortgage repayments in this evolving financial landscape, we welcome you to give us a call on 1300 665 906, or have us call you! We are here to help in any way possible, it’s what we do!