Australian Property Market Australian Property Market
Australian Property Market

On Tuesday the 7th of March, The RBA announced the 10th consecutive cash rate increase of 0.25%. This raises the current cash rate to 3.6%.

The cash rate can affect other moving parts of the economy, like employment, investment, inflation, and spending. Therefore, if the economy is strong and high demand is pushing up the price of goods, the RBA can increase the cash rate to slow the economy and inflation rates down. The RBA can also increase spending or create more job opportunities by reducing the cash rate.

A single cash rate increase affects an Australian household, so how is our nation coping after the 10th consecutive rise?

Efforts to conserve a dollar have led existing mortgage holders to switch to variable interest rates. Alas, new homeowners are confronted with a formidable challenge as they adapt to the “new normal” from the bygone days.

The motto “Stop paying someone else’s mortgage and get your own” had been extolled for a considerable time until the RBA intensified the pace of rate hikes.

If coming off a fixed rate on a mortgage of $500,000 and an interest rate of 2%, a homeowner may have to find an additional $12,000 per year to service their mortgage payments.

What influences the RBA’s decision to change the cash rate?

Ahead of its monthly rate announcements, the RBA delves into a myriad of topics that impact the Australian economy. Inflation, employment, international economic trends, and the growth rate of our economy are just a few of the issues that they address.

Keeping well-informed in these issues provides homeowners with a winning strategy to help navigate changing tides. To this end, having a knowledgeable broker by your side is worth its weight in gold.

Brokers are constantly researching the market and stay informed by banks and financiers. That is, your broker can be your sharpest tool during these turbulent times. The unprecedented nature of our current financial climate has made brokers a highly sought-after service by homeowners and investors.

Save stress and invest.

Make sure that when you approach a professional broking service, they are credible and have genuine customer feedback. To qualify a broker’s credibility, check out their customer reviews. Take time to see what people are saying about their experience.

What should you do after an interest rate increase?

Review your current home loan interest rate to ensure you’re getting the best deal.

This is the perfect time for refinancing your home loan to save yourself money and take advantage of refinance cashback offers which can be up to $5,000.

Although banks raise the interest rates for home loans, they also raise the interest rate on your savings accounts. However, rental demand is higher than ever before, so it could be more beneficial to you to use your savings to purchase an investment property.

How can Fox Home Loans help you?

Our goal is to source you the best home loan deal that is available for your circumstances. Whether you’re interested in refinancing your current home loan or in taking advantage of your savings to purchase an investment property, we’re here to help you.

We do all the work, so you don’t have to!

We monitor the market everyday for the best deals for our customers. There are hundreds of home loan products available for our customers, so we work through these to find the home loan that’s perfect for your unique circumstances with the lowest interest rate.

Essentially, we save you money and time.

Speak to your home loan specialist today. Its obligation free.

About the Author

Rowdie Lang

Rowdie has been a part of our Team since 2020. He has witnessed firsthand the ongoing evolution of the finance industry as technology continues to change the way customers' access financial services. He has a passion for helping people and relishes the opportunity to work alongside our teams every day as they help our customers financial dreams come true.

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