The RBA will be holding their monthly meeting on Tuesday and while many predict rates to hold for now, an interest rate cut could be on the cards for the future.
A finder.com.au survey of industry experts found that 60 per cent believe that the RBA’s next interest rate move will be downwards, a stark contrast from just 22 per cent who believed that would be the case as recently as December 2018.
A cut in the official cash rate would bring them down from their historic low of 1.5 per cent to a meagre 1.25 per cent or perhaps even lower.
Speculation around a possible rate cut is due to various factors such as poor GDP growth, weak consumer spending and falling house prices. However considering that an interest rate hike was seeming like the most probable next move by the RBA just a few months ago, what will happen next is still anyone’s guess.
Does a change in the official rate matter?
As always, it’s important to keep in mind that banks and lenders are under no obligation to keep their interest rates in line with movements from the RBA.
Interest rates are already extremely low, so even if the RBA were to drop rates we may not see any savings on mortgage rates as a result.
However if rate cuts were passed on it might entice some people into the property market to take advantage of any savings.
Whether you’re a current borrower or not it is always worth keeping on top of what is happening in regards to interest rates so you know how to spot the best deals and can plan for the future.
For any information about current rates on offer talk to Professionals Finance.