No Need for Lower Interest Rates says RBA
At its April board meeting, the Reserve Bank of Australia has kept interest rates at 3 per cent for the fourth consecutive month, as the Australian economy continues to show areas of strength and improvement.
Loan Market spokesperson Paul Smith said that the decision to keep rates on hold was widely expected with the positive numbers coming out of sectors such as housing and with inflation remaining comfortably within its targeted range.
“The RBA has indicated that the inflationary pressures that prompted many of the rate cuts in 2012 have eased. The RBA believes that a 3 per cent cash rate is currently the correct level to grow the economy at it’s targeted pace,” Mr Smith said.
Mr Smith said that homeowners would still benefit from lenders who would continue to adjust their interest rates, regardless of RBA rate movement, to attract new customers and retain current ones.
“Cost-of-funds issues have eased for many banks - many Australian savers would have seen evidence of this by the dropping interest rates on their savings accounts. This has opened the door for lenders to now move their rates independently of not just the RBA, but each other,” he said.
Mr Smith said that homeowners or home buyers, who wanted to get better deals on their home loans, whilst the RBA kept the cash rate on hold, should be proactive in seeking deals.
“Advertised interest rates may not fluctuate very much in the coming weeks but that doesn’t mean there isn’t scope to get a lower interest rate. Many banks and lenders are discounting interest rates or waiving fees, or both, for customers who apply some pressure and ask the right questions,” he said.
“There are lenders out there going so far as to offer fuel discounts of up to $1 per litre. There’s some creative competition taking place right now and opportunities for borrowers to save money.”
Mr Smith said that a mortgage broker would be a useful partner for anyone looking at a home loan because of their experience in dealing with lenders and knowing which ones were offering the strongest discounts.
“A mortgage broker will know which banks are making the right competitive moves and will present a home owner or buyer with a number of options that will suit their financial goals and circumstances.”