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Interest rates are likely to remain on hold for the next few months despite strong quarterly GDP (Gross Domestic Product) figures.
A patchy outlook for the next few months though has prompted economists to call for a period of interest rate stability, and indeed the prediction is for the Reserve Bank of Australia (RBA) to keep rates on hold at 4.5% at its September meeting next week.
Most believe a rise before the end of the year is likely, with data pointing to an increase of 0.25 - 0.5%, probably at the 'Cup Day' meeting on Melbourne Cup Day in November.
Although a period of ...
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Categories: Finance News. Tags: Home Loans, Interest Rates, Rba, Reserve Bank of Australia.
Home loan commitments fell in June to their lowest point in nine years, according to the Australian Bureau of Statistics.
Economists are attributing the decrease to less demand from investors, higher interest rates, and slowed housing momentum.
The ABS figures show that housing finance commitments for owner-occupied housing fell 3.9 per cent in June – almost double the market forecast of 2 per cent.
CommSec economist Craig James said investors had previously helped keep the market afloat, but that their numbers were dwindling.
"Certainly, the rate hikes that have been applied late last year and early last year are continuing to bite," ...
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Categories: Finance News. Tags: Home Loans, Interest Rates, Rba.
Mortgage holders can expect the major banks to increase interest rates despite being given another reprieve from the Reserve Bank of Australia (RBA), says leading mortgage broker Loan Market.
Loan Market Chief Operating Officer Dean Rushton said despite the RBA leaving the cash rate on hold at 4.5 per cent, lenders will soon lift their rates independent of the RBA.
Mr Rushton said banks have indicated they will lift rates against the trend and out of cycle because their cost of funds is increasing due to the ongoing European debt crisis and the roll-over of cheaper funding.
“Enjoy the ...
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Categories: Finance News. Tags: Dean Rushton, Loan Market, Rba.
The succession of interest rate rises implemented by the Reserve Bank of Australia has been the biggest recent deterrent to borrowers, a national survey has found.
The poll by leading mortgage broker Loan Market found 64 per cent of respondents said interest rate hikes by either the RBA or the banks independently had the greatest negative impact on the home finance market.
Loan Market National Operations and Risk Manager Ivan Karamatic said the six increases by the RBA between October last year and May, 2010, had effectively subdued the housing finance and property markets.
“Both markets have been flattened ...
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Categories: Finance News. Tags: First Home Buyers, Loan Market, Rba.
A surprise drop in unemployment could mean an August rate rise, according to some economists.
RBC Capital Markets economist Su-Lin Ong said with more than 45,900 jobs created last month, inflation will be affected and the economy will need to be monitored carefully.
"We're at a time when inflation is on the high side at a time when there's pretty limited spare capacity," she said.
Nomura Australia chief economist Stephen Roberts said the RBA might wait for more information on the state of the global economy, particularly the US and the ongoing fiscal crisis in Europe, before hiking up rates again.
"But ...
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Categories: Finance News. Tags: ABS, Interest Rates, Rba.
The RBA decided to leave the official cash rate unchanged this month at 4.5 per cent, citing volatile financial markets caused by problems in Europe as the main reason.
It’s the second month in a row the RBA has kept rates on hold.
Governor Glenn Stevens hinted that the next rate movement may not be for a few months to come.
“The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. Pending further information about international and local conditions for demand and prices, the Board views this setting of monetary ...
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Categories: Finance News. Tags: Home Loans, Interest Rates, Loan Market, Rba.
The RBA is expected to keep interest rates on hold at its board meeting tomorrow, due to uncertainty in the global economy and financial market volatility.
Last week, Loan Market Executive Chairman Sam White predicted that when the RBA next moves rates, there’s a chance they could go down.
Financial services company Credit Suisse agrees, saying the market is pricing in a 10 per cent chance of an interest rate cut, and virtually no chance of rates increasing in the next 12 months.
The RBA lifted interest rates six times between October and May this year.
To find out if you have the ...
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Categories: Finance News. Tags: Interest Rates, Loan Market, Rba, Sam White.
Most Australians with a home loan can afford for home mortgage rates to rise another percentage point before they face real financial difficulties, a national survey has found.
The poll by leading mortgage broker Loan Market found almost 75 per cent of respondents could cope with at least three more quarter percentage point rises in the cash rate by the Reserve Bank of Australia (RBA).
Loan Market Chief Operating Officer Dean Rushton said one in four of the 479 people surveyed said variable rates could go above 10 per cent before their crisis point was reached.
Mr Rushton said ...
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Categories: Finance News. Tags: Dean Rushton, Home Loan, Interest Rates, Rba.
The Australian newspaper has revealed mortgage holders may soon be facing interest rates almost as high as the peak of the economic boom.
An analysis of the standard variable rates at the big four banks showed lending rates are between 274 and 301 basis points above the official cash rate of 4.25 per cent.
The lowest of these is the NAB at 6.99 per cent, with Westpac’s standard variable rate highest at 7.26 per cent.
The spread between bank lending rates and the official cash rate is much greater than at the peak of 2008’s economic boom.
Some economists believe the spread ...
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Categories: Finance News. Tags: Interest Rates, Loan Market, Mortgage Broker, Mortgage Holder, Rba.
Mortgage holders shouldn’t panic despite the Reserve Bank of Australia (RBA) lifting official interest rates, says leading mortgage broker Loan Market.
Loan Market Executive Chairman Sam White said today’s decision by the RBA to increase the cash rate from 4.0 per cent 4.25 per cent was unfortunate, as increasingly there were underlying signs of business weakness and reduced consumer confidence.
But Mr White said mortgage holders needn’t worry about the value of their properties, and that any suggestion of a crash in Australian house prices was way off the mark.
“A shortage of properties in most major Australian cities ...
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Categories: Finance News. Tags: Interest Rates, Loan Market, Rba.
