Across the nation, a collective sigh of relief is spreading among borrowers following the Reserve Bank of Australia’s recent declaration of a rate freeze for August 2023. With the cash rate remaining at 4.10%, homeowners are finding a welcome respite after enduring several collective rate hikes over the last 18 months. The central reasoning behind the RBA’s decision to keep the cash rate unchanged lies in the fact that Australian households have not yet encountered the repercussions of the previous rate increases, even though they are already struggling with the impact of rising living expenses.
The Reserve Bank of Australia has made it clear that they are prepared to take necessary actions to steer inflation back within their target range of 2-3%. However, these desired figures might not materialize until at least mid-2025, as indicated by Philip Lowe, the Governor of the RBA.
While Australians continue to face the increasing expenses of daily life, a span of several rate hikes from 2022 to 2023 has ushered in several positive shifts in our economy. Presently, the unemployment rate sits at an almost half-century low, wages exhibit an upward trajectory, and housing prices are slowly in decline. For those who were prepared for these rate increases, the current market conditions might present a chance to delve into their next property investment.
Seeking the support of a knowledgeable mortgage broker for insights on rates, financial products, and for maneuvering through economic uncertainties can be beneficial. Maintaining awareness about the cash rate, available cashback incentives, and the most recent updates in the financial sector is key to ensuring you are in the best position possible. It’s timely to consider a home loan health check if this is not something on your radar.
Homeowners are foreseeing the end of their fixed-rate mortgage and the inevitable transition to a variable rate. In recent times, refinancing has emerged as a noteworthy trend, with lenders and banks actively competing for business during this turbulent phase.
Despite the current reprieve, the respite from rate hikes is not likely to last long. Several reports are forecasting a likely increase in the cash rate for September’s announcement.