RBA Rate Announcement
Rates to stay on hold, but are borrowers still losing out?
As expected, the Reserve Bank of Australia (RBA) has left rates on hold for the sixth consecutive month, yet this isn’t necessarily good news for borrowers.
In recent weeks, a number of banks have independently increased their interest rates for residential housing investment loans. This is based on a rise in the cost of funding, as banks adjust their rates to protect their profit margins. RBA Governor Glenn Stevens had this to say about the changing credit market:
“Low interest rates are acting to support borrowing and spending. While the recent changes to some lending rates for housing will reduce this support slightly, overall conditions are still quite accommodative. Credit growth has increased a little over recent months, with growth in lending to investors in the housing market easing slightly while that for owner-occupiers appears to be picking up. Dwelling prices continue to rise in Melbourne and Sydney, though the pace of growth has moderated of late. Growth in dwelling prices has remained mostly subdued in other cities. Supervisory measures are helping to contain risks that may arise from the housing market.”
So, what does all this mean for you? With the recent changes in interest rates, now is the time to consider whether your current loan is the right one for you, right now.