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AgentOneAnonymous Visitor
 | All of the major banks in Australia lowered rates earlier this month. After the Reserve Bank lowered the official rate by 1% they could hardly not, the outcry would have been deafening. Other lenders lowered rates too, such as Aussie, RAMS. The whole RBA rate cut was passed on to homeowners. Standard variable rates now sit at between 5.74% and 5.91% while fixed rates have come down too.
As someone who worked in the banking industry for nearly 15 years I believe the banks were right to lower rates each time. Whether the banks and other lenders will cut rates again is not an easy one to call. Some in the know are claiming many lenders may not pass on future rate cuts, and will cite the high cost of funds and the global financial crisis as their reasons. Other economists and forecasters are confident that banks will cut rates again, but may not pass on the full RBA rate cut, instead, keeping some for themselves.
The RBA meets again on the first Tuesday in March, and predictions are for somewhere between a 0.25% cut or a 0.50% cut to official rates. The official rate is currently 3.25% and if this comes down again, mortgage rates may or may not follow. This is a difficult time for some homeowners who are wondering whether to fix their home loan now or wait a bit longer, and those who did fix their rate last year before the cuts began are now paying around 4% more on their home loan than those currently on a variable rate. But there are also many home owners who are enjoying the lower rate and putting the savings to good use.
It's worth noting too that while home loan rates have come down, credit card rates are still high and have not enjoyed many rates cuts recently. So banks need to consider all rates, not just home loans.
Let's wait for March 3 to see what happens to bank rates..... |