First home buyers set to pounce as rate cut looms: Finder

First home buyers set to pounce as rate cut looms: Finder
First home buyers set to pounce as rate cut looms: Finder

Next Tuesday the Reserve Bank of Australia are expected to cut the official cash rate for the first time since mid 2016.

Finder, Australia's most visited comparison website, has seen a huge uptick in first home buyers visiting their site as a result of the expected cut which would see the cash rate drop to 1.25%.

It has sat at 1.5%, a historic low, since August 2016, the last time the rate moved. 

Finder has seen a 55% rise in visitors to first home buyer guides so far this month compared to May 2018.

It’s the biggest spike in visitors to those pages in 12 months, according to Finder.

Graham Cooke, insights manager at Finder, says first home buyers may finally get their opportunity to break into the market. 

“There’s a perfect storm brewing for first home buyers. Property prices are dipping, lenders are dropping their rates and a first home buyer’s scheme is on the cards.

“After 31 months of no change, all signs are pointing to a cash rate cut next Tuesday. The expected move is causing a flurry of rate drops among lenders, especially on the fixed home loan front.”

Lenders are already lowering their rates, with 40 lenders dropping rates across 333 products in May.

BankWest, UBank, CUA, Greater Bank and ME Bank are among those that have cut rates.

The lowest variable rate on the market comes from Mortgage House's Home Loan Prime - Early Bird Rate Cut Special which is just 3.29%.

TicToc has the lowest fixed rate, offering 3.39% for one year.

Cooke urges property hunters to make sure they consider possible rate hikes down the track.  

“While we’re on the verge of a new historically low cash rate, what all borrowers need to consider is that rates will – eventually – go up. With that in mind, you should always factor in a 2-3% buffer on top of your current home loan interest rate to accomodate for future rate hikes if and when they do happen."

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

Tags: 
First Home Buyers Finder.com.au

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