Following two rate cuts in as many months savvy borrowers can sniff out a bargain home loan with the most competitive lenders offering variable interest rates from as little as 2.89 per cent.
The June and July cuts will save variable rate mortgage holders around $100 per month, RateCity research director Sally Tindall told ABC news.
The rate cuts are good news and bad news for first timers saving for a home deposit. The bad news is the interest rate on your savings account has probably taken a tumble. But the good news is you’ll pay much less on your mortgage when you do smash that deposit target.
Economists are tipping yet another rate cut later this year, but analysts say it is unlikely banks will pass on the full cut because their margins get squeezed the closer rates move to zero. In fact none of the major banks passed on the June and July rate cuts in full.
While borrowers might be happy in the face of the cheapest lending conditions we’ve ever seen, some think we could be even happier.
REIQ CEO Antonia Mercorella released a statement this month saying the Reserve Bank should have been braver in June and made a 0.5 per cent cut to really give borrowers a boost and kickstart a property market rally.
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Record rate cuts put $100 a month in your pocket
The Reserve Bank of Australia has lowered the official cash rate to an even further historic low this month with borrowers the big winners.