RBA Finally Offers Some Relief
Struggling sectors of the economy and home owners battling cost of living increases will be satisfied the Reserve Bank of Australia (RBA) has finally offered some interest rate relief, says leading mortgage broker Loan Market.
Loan Market Corporate Spokesman Paul Smith, said the RBA lowering its cash rate by half a percentage point to 3.75 per cent was a tremendous result for consumers.
But he said the key now was how the banks respond given their recent track record of raising their variable rates independently of the RBA or only passing on part of a rate cut.
“Home owners have finally had a win and there will be significant pressure on lenders to pass on this 50 basis points cut in full,” Mr Smith said.
“We have seen one major lender already increase the discounts on variable rates ahead of the RBA decision and we hope that is a welcome sign that the others will follow suit by lowering their variable rates.”
Mr Smith said a Loan Market consumer survey this week had found almost 90 per cent of respondents had expected the first rate reduction by the RBA since December, 2011.
“Any action other than a rate cut by the central bank would have been a massive let down for many consumer groups and struggling sectors such as retail and housing,” he said.
“The RBA had remained on the sidelines until this month to properly assess the impact of some fairly significant market movements, but they now realise the economy needed some stimulus.”