As some business leaders came forward to state the economy can handle a large cut in interest rates to boost business sentiment, nationally few new jobs are being created apart from in the mining industry.
The Reserve Bank has cut interest rates by 0.25 per cent.
The 25 basis point fall comes on the back of a similar cut last month. The reduction is good news for people paying off a mortgage. “This will put an extra $60 into the pockets of borrowers each month,” says Domain property expert Carolyn Boyd.
The official interest rate is now 4.25 per cent.
Each 0.25 per cent drop in interest rates slices about $60 off the monthly interest cost of an average Australian mortgage.
Boyd says, coupled with last month’s cut, the drop represents a double windfall for borrowers because if they can keep their repayments at the same level they will be able to pay down their mortgages faster.
“It’s a smart idea to keep your repayments at the same amount as you were paying before this cut, and the one on Melbourne Cup day,” she says. “That way you can pay your mortgage off sooner but have no less money in your pocket than you did last month. There’s plenty to gain here with no extra pain.”
Many lenders don’t automatically readjust repayments when rates are cut, meaning borrowers often have to simply sit back and watch their loan shrink faster when rates fall.
The ongoing eurozone crisis may force the Reserve Bank to introduce further interest rate cuts before Christmas. So if this year the RBA decides to dress up as Santa instead of the Grinch, a leading property investment group says investors need to reconsider their financial position to make sure they capitalise on the move. Continue reading Tips to maximise your position should rates fall→
The Reserve Bank has cut interest rates for the first time in more than 2½ years, bringing relief to households and corporate borrowers.
As widely tipped by economists, the central bank today lowered its key cash rate by 25 basis points to 4.5 per cent. The move reversed the increase imposed on Melbourne Cup Day last year, the most recent time the RBA has shifted rates. Continue reading RBA cuts interest rates→
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