Official cash rate on its way to 0.5%, says one third of Finder's RBA Survey experts

Official cash rate on its way to 0.5%, says one third of Finder's RBA Survey experts
Official cash rate on its way to 0.5%, says one third of Finder's RBA Survey experts

Nearly a third of experts and economists surveyed in finder.com.au's RBA Cash Rate Survey predict the RBA to bring the official cash rate all the way down to 0.5 percent.

Just over 70% of experts predict the bottom of the cycle at 0.75%.

The numbers are more convincing in favour of a rate cut in July, with 68% tipping a second cash rate cut in as many months.

Graham Cooke, insights manager at Finder, said lenders should be gearing up to get busy with further rate reductions.

“The RBA will have its scissors out for the foreseeable future to try to stimulate inflation and reduce unemployment, and lenders should be ready to follow suit.

“The heat is on for those banks who only passed on a partial rate cut (less than 25 basis points) after the June rate reduction.

"Doing the right thing by their customers this time around – by passing on a cut in its entirety – could see them redeem themselves,” he said.

“So far, we’ve seen more than 700 variable rate products reduced in June alone, with more than 1,000 rates reduced if you include fixed rate loans. 

Across all of the variable rates Finder compares, the average rate has dropped more than 20 basis points in June.

“The winners here are borrowers – they are spoilt for choice with the lowest home loan rates we’ve ever seen,” he said. 

Currently, the lowest variable home loan rate on the market is 3.09% from Reduce Home Loans, while some banks (UBank and Greater Bank), are offering a one year fixed rate of 2.99%. 

It was only late last year that nearly 80% of economists thought the next cash rate would be a hike.

To enlarge, click here.

Official cash rate on its way to 0.5%, says one third of Finder's RBA Survey experts

Finder research suggests two further cuts, the most popular forecast for the rest of 2019, would see a variable rate mortgage holder with a loan of $1 million save $3,538 a year.

“If the cash rate does get to 0.50%, down from 1.50% in May, and your bank were to pass on all of the four rate cuts in full, an average mortgage holder* could be saving nearly $3,000 a year on their mortgage,” Cooke said.

“Of course you don’t have to wait around for these cuts to happen – you can go home loan shopping for a better deal anytime. 

“It’s a borrower’s market. A new standard has been set with sub-3% home loan rates so compare options to maximise your savings in the long run.” 

To enlarge, click here.

Official cash rate on its way to 0.5%, says one third of Finder's RBA Survey experts

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.

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Rba Rate Decision Finder.com.au

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