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The Reserve Bank of Australia will be meeting tomorrow for the final time this year, and while some are hoping for an interest rate drop in time for Christmas, it’s looking likely that interest rates will remain unchanged.
This year, we’ve all been left wondering how low rates could go, but while rates didn’t drop as low as some expected, we did see two rate decreases of 0.25% each in February and May, bringing the cash rate to a record low of 2%.
A few have tipped for an interest rate drop or two next year, but homeowners need to remember that just because the RBA lowers interest rates, it doesn’t mean that lenders will follow, as we have seen this year with Westpac, CommBank, NAB, ANZ and a large number of non-major lenders all making the move to lift their rates independently of the RBA.
For this reason, it’s worth keeping an eye on the interest rates you’re paying. According to a survey conducted by Mortgage Choice, one in five first homebuyers don’t know that lenders can raise their interest rates independently of the RBA.
It’s generally not common for lenders to move out-of-cycle to the RBA, however it can be argued that a rise in interest rates has been a good thing in helping to cool down overheated real estate markets in Australia.
However, it also means that some mortgage holders might be paying more on their home loans than they need to be, with not all lenders having chosen to raise their rates. Mortgage holders should take the time to periodically check their rates and fees and compare it with what else is available on the market to see if there are any savings to be made. If you need assistance then Professionals Finance can help you find the best home loan package to suit your needs.
It will be interesting to see where interest rates will go next year, but hopefully if they do drop then homeowners will see some of the savings too.
Where do you think interest rates are headed? Will they change at tomorrow’s RBA meeting?