September 24, 2024
Anthony Waldron, Mortgage Choice CEO:
“With the spring selling season underway, the Reserve Bank’s decision to keep the cash rate on hold will be welcome news to borrowers and hopeful buyers looking to get a foot on the property ladder.
“There are a couple of reasons why the Reserve Bank decided to keep the cash rate on hold in September. The latest economic data from the Australian Bureau of Statistics (ABS) revealed that annual economic growth over the June quarter was the slowest since the 1991-92 financial year, suggesting that current interest rates are putting downward pressure on Australia’s economic growth. ABS data also showed that inflation is continuing to ease, with the monthly CPI indicator rising 3.5% for the 12 months to July, down from 3.8% in the 12 months to June. The RBA’s best tool to drive inflation towards its target range of 2-3% is the cash rate, so while inflation is trending in the right direction, it’s still not low enough for the RBA to consider cutting the cash rate yet.”
“Current home loan interest rates are working as intended to slow the pace of growth in home prices, with the PropTrack Home Price Index showing that national home prices rose just 0.22% in August.
“Our Mortgage Choice home loan submission data is showing that borrowers are continuing to opt for variable rate home loans during this extended period of relatively high interest rates. In August, just 3% of loans had a fixed component, and that trend is continuing so far in September.
“If you’re hoping to buy in spring, and don’t yet have a pre-approval, I’d encourage you to meet with a mortgage broker to get a pre-approval sorted and ensure you’re in a position to make an offer as soon as you’ve found the right property to purchase.
“For borrowers who haven’t reviewed their loan so far in 2024, now is a great time to meet with a broker to check that your loan still meets your needs. Mortgage brokers can help you understand if your home loan interest rate is still competitive, and if the structure and features of your loan work for you.”
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