If you are among those considering home loans, investment loans or refinancing your Perth area home, you are probably excited that the RBA has dropped the cash interest rate even further to 2.25%.
This drop came as a total surprise to many economists. Predictions for 2015 were all over the map, with some calling for late rises in the interest rate, some calling for no movement either way and some predicting one or even two drops in the rate. The announcement by RBA Governor Glenn Stevens on 4 February 2015 came without warning and without fanfare.
According to the statement by Mr Stevens, the board considered many factors when deciding upon another rate cut. Drops in commodity prices, especially oil, were seen as an indication of lower demand and higher supply. The board believes that lower oil prices will result in lower CPI inflation rates.
Economic growth in Australia continues to proceed below trend, with a particular weakness in domestic demand growth, resulting in a slight rise in unemployment. These factors could offset the positive effects that lower energy prices could have on the economy.
A falling Australian dollar and lowering inflation also contributed to the decision. Lowering the rate once more is expected to produce the desired level of inflation while encouraging sustainable economic growth.
What it Means to You
To you, the meaning is simple. Interest rates are low and the economy is going to rebound slowly. That means that there will never be a better time to buy than now. Every month that you delay in upgrading your current home or buying your first home can cost you thousands of dollars.
Call Purely Finance Today
If you are looking for a home loan or to refinance your current home in the Perth area, call us today. Our expert mortgage brokers and financial planners can leverage their vast experience in the Perth market to provide you with the best loan and the best advice for your individual situation. Call 1300 745 778 today.