Nobody wants to see their mortgage rate go up, but that could happen if the Reserve Bank decides to lift their current long-running low interest rate streak.
There are a lot of differing opinions about whether or not the country will see a change in the current cash rate of 1.5 per cent any time soon, but the general consensus is that when rates do eventually change they will head upwards.
Reserve Bank Governor, Dr Phillip Lowe, seems to have confirmed this sentiment, stating that “it is likely that the next move in interest rates in Australia will be up, not down”.
Lowe also went on to say that the RBA “does not see a strong case for a near-term adjustment in monetary policy”.
Despite the Reserve Bank Governor himself suggesting a “near-term” rise is unlikely, some economists think that a 2018 rate rise is possible. The main factors that could lead to an interest rate increase are strong employment figures and growing confidence in business.
Is a cut possible?
Anything is possible, however it would have to take a large international economic shakeup to lead to an interest rate cut. Nothing is for certain when it comes to interest rates, however an interest rate cut seems unlikely at this point in time.
Lenders will do their own thing
Whether or not the Reserve Bank lifts rates anytime soon, there is nothing to say that lenders won’t lift their rates.
We have already seen banks raising and dropping their rates out of cycle with the RBA so there is no knowing when a change might happen.
This could be as good as it gets
There is no way to know for certain when interest rates will change or whether they will go up or down but mortgage holders should take the opportunity to pay off their mortgage as quickly as possible while we are in a low interest environment.
For any advice about finding the best home loan contact Professionals Finance.