Interest rate cut tipped for August

houseThe Reserve Bank of Australia looks set to drop the official interest rate to an all-time low of just 1.5 per cent as soon as next month.

At the RBA’s July meeting last Tuesday they left the cash rate at 1.75 per cent. Interest rates were cut to the historic low in May 2016, following 12 months of stability.

There may have been a chance that the RBA would have eased policy this month if not for global volatility following the Brexit, and uncertainty following the drawn-out Federal Election results.

In the words of RBA governor Glenn Stevens, it would be “prudent” to hold rates this month, however there were hints that interest rates could be lowered in the near future.

“Further information should allow the board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate,” Mr Stevens said in a statement.

The RBA will look to June quarter inflation data, which comes out later this month, to help them make next month’s interest rate decision. However, the Board will also need to carefully consider whether another interest rate cut could refuel high growth in the Sydney and Melbourne housing markets.

If you’re thinking about fixing your home loan rate it could be worth waiting to see what happens next month, however it’s always important to keep in mind that lenders won’t necessarily move their rates in line with the RBA and there can be a great deal of variance from lender to lender.

It’s always a good idea to stay updated with interest rate movements to ensure you’re paying the best rate available. For help finding the best interest rate and mortgage package talk to the team at Professionals Finance.