A lot of mortgage holders across the country have been waiting with bated breath to see what the Reserve Bank of Australia (RBA) will do next. There has been a fair bit of talk about whether the bank would follow through on it’s promise of a trim, but it looks as though the tide has finally turned. The RBA has decided to trim the official cash rate by 25 basis points, bringing it to a record low of 2 per cent.
If you’ve been wondering how another rate cut could affect you, ponder no more. The low interest rate environment has already helped a lot of Australians make payments on their home loan by reducing the amount of interest they need to settle each month, and it appears this snip could do much the same. The Real Estate Institute of Australia noted that banks still have to pass the decision on to their customers, but if they do, you could save around $70 per month.
In fact, it might even persuade you to consider home loan refinancing to a lower rate product. Be aware that there are a few costs involved in making this switch, so it’s worth having a chat to your mortgage adviser before making the commitment.
This was a point echoed by President of the Real Estate Institute of New South Wales, Malcolm Gunning, who pointed out that you should always take care to have your finances in check before taking out a mortgage.
“Today is historic for all mortgage holders and those seeking to take out a mortgage in the future,” Mr Gunning said in a May 5 release.
“However, these unique conditions should be approached with caution and we cannot stress enough the importance of carefully reviewing your financial situation before committing.”
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!