Economists unanimously expect no rate change tomorrow, but cut could be on the cards this year: Finder
Across the board, it appears that economists expect no change in interest rates tomorrow, with nine economists surveyed by finder.com.au expecting that the Reserve Bank will hold.
Despite this, and Property Observer’s recent exclusive finding the same agreement, finder.com.au’s Michelle Hutchison says that there could be a cut on the cards later this year.
“It’s unusual to see variable home loan rates move outside of the Reserve Bank’s cash rate changes, with the latest lender HSBC to drop its variable rates this month. This shows that anything can happen this year as it’s now harder to predict when variable rates will move and by how much,” Hutchison said.
“But with the home loan war heating up, it’s good news for borrowers who can capitalise on the competition by comparing home loans and switching to cheaper deals, particularly when borrowers are taking on more debt.”
With the national average home loan size up 6.4% since November 2011 when compared to November 2013 using Australian Bureau of Statistics data, the highest loans in the country are in New South Wales, at $358,800, a 10% increase over the same period.
A 0.50% cut to interest rates would bring the average variable rate to 5.34%, saving $110 per month, or $39,600 over the life of the loan.
“Don’t get caught up in rate cuts because it’s the actual interest rate that matters. There are currently 33 variable rate loans under 5%, so it’s more important than ever to make sure you compare home loans regularly this year,” she said.