Lowest Interest Rates in Australia’s History
Today the Reserve bank of Australia cut the official cash rate to an all time record low of just 2%, this is the second cash rate cut in Australia this year.
This reduction in interest rates will take the lowest variable home loan rate of 4.23% down to a record low of 3.98%. The cut will reduce the cost of a $300,000 principal and interest mortgage which has been taken over a 30 year period by approximately $44 per month. Home owners are encouraged to keep their monthly repayments the same which would result in a saving on the average mortgage of $11,160 in interest and pay their mortgage off 13 months sooner.
This latest rate cut will also give property buyers a major advantage as the cost of borrowing will become more affordable than ever before. Lower interest rates encourage borrowing and spending, and credit is recording moderate growth overall. Increases in property market lending have been steady over the past 6 months and house prices continue to rise strongly in Sydney. Buyers need to be extremely cautious about over-extending themselves while rates are low and ensure they allow for increased repayments in the future.