8 Jul 2011
Homeowners received some very welcome news on Tuesday, when the Reserve Bank announced that it would again keep interest rates on hold at the current cash rate of 4.75 per cent.
For awhile now economic experts have been predicting that interest rates would go up in the middle of 2011, but it seems that Australia’s economy hasn’t performed as strong as hoped and despite predictions, interest rates have now remained steady since November last year.
In fact, the futures market is even starting to predict that an interest rate fall is more likely than a rise right now. Before this month’s interest rate announcement the ASX Futures rate tracker showed that there was a 90 per cent chance of rates staying the same and a 10 per cent chance of rates going down – there seemed to be zero per cent chance of a rate rise.
Steady interest rates are good news for homebuyers and mortgage holders, because while most household expenses are going up, home ownership itself seems to be getting cheaper. For a lot of areas around Australia home prices are falling and actual mortgage rates are beginning to fall too, so it’s an ideal time for those who are looking to get into the real estate market.
For those who already own a home – now is a great time to start getting ahead on mortgage payments in case interest rates do go up sometime in the near future.
Let’s hope that interest rates stay steady for a while longer though, so Australians at least have one less price increase that they have to worry about.