RateCity has released a comprehensive report highlighting the issues facing home buyers and property investors when they apply for a mortgage. Here are the key points.
1. Interest rates cut across all categories, largely led by a 0.25 per cent cash rate cut in August.
2. Home loans: Now more than a year since the emergence of investor pricing and the ‘ideal borrower’ and the rate gap has continued to widen. Home loan rates have continued to trend downward after two RBA cuts in 2016, and a total of four cuts since February 2015, following a period of 18-months with rates on hold. Shorter-term fixed rates are sitting significantly lower than variable rates on average, suggesting there may be some room for rates to go lower in the easing cycle. Longer-term fixed rates are above variable, which suggests the low rates won’t last for ever.
The Reserve Bank of Australia has decided to continue with its policy of keeping mortgage rates law.
RateCity reported that the Reserve Bank may have left the cash rate unchanged at 1.75 per cent today, but market analysis indicates there’s still at least one rate cut still to come in 2016.