RBA Leaves Consumers in a Cloud
Home loan customers will be disappointed the Reserve Bank of Australia (RBA) has continued to cloud the interest rate outlook by keeping its cash rate on hold, says leading mortgage broker Loan Market.
Loan Market Corporate Spokesman Paul Smith said today’s decision by the central bank’s board to leave the cash rate at 4.25 per cent does reflect a stable local economy and mortgage holders will be looking for their lenders to apply the same rate hold.
“The situation inEuropehas been improving and general sentiment in the economy has been steadily showing signs of an upswing, but lenders have not made things easier on borrowers by acting completely independently of the RBA rate decisions,” Mr Smith said.
“For two months, lenders have been independently moving their variable interest rates by modest amounts. It’s proving difficult for many consumers to predict exactly where rates are headed when it appears the RBA currently holds minimal influence.”
Mr Smith said the RBA does appear to be ready to lower rates in the future to combat stalled sectors and recover the economy.
“At the end of the day, if we see further domestic stalling the RBA has made it clear it will act by lowering rates. If that were to happen, banks would be under enormous pressure to move as well.”
Mr Smith said that the cloudy interest rate situation has begun to hold some buyers back.
“After a strong start this year, Loan Market’s enquires from first home buyers had dropped off 20 per cent in March. For a consumer segment that’s been dormant for nearly two years, this is a certainly a setback.”
Mr Smith said the RBA’s stance on the cash rate and banks going it alone with their rate decisions had prompted an increase in enquiry for fixed rate home loans.