Latest Interest Rate news
The Reserve Bank of Australia (RBA) today moved to cut official interest rates by 100 basis points. The cash rate is now at 3.25 per cent, the lowest level since 1964.
The pressure is now on lenders to pass on the rate cut in full to homeowners. Harley Dale, Housing Industry Association chief economist says it's going to be damaging to confidence levels is they don't.
Today's move follows a trail of rate cuts late in 2008, when the RBA cut rates four times, by a total of 300 basis points. The last rate cuts was in December when the RBA also cut a whopping 1% off the cash rate. Slowing economy, low housing sales and rising unemployment has pushed the RBA to consider drastic rate cuts.
There are some economists that believe the cash rate could go as low as 2 per cent by September 2009.
Consumer advocates and the housing industry called on the banks to pass on the rate cut in full. With average variable home loans around 6.8% homeowners may soon see rates below 6%. if the banks pass on the 1% rate cut in full. If this happens, home owners with a $250,000 mortgage will save around to $160 a month in interest repayments.
First time homebuyers will rejoyce in the lower rates, and thousans get set to take advantage of the boost to the first homebuyer grant before June 30. After this date the grant is set to revert to the original, lower amount.
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