Cross Counter ridden by jockey Kerrin McEvoy won the 2018 Melbourne Cup. Experts believe the RBA won’t move on rates until Melbourne Cup 2019. Picture: AAP Image/Dave Crosling.
THE safest bet today was that Reserve Bank would keep rates on hold, which it has, but odds are that it will do so for another entire year — right through to the next Melbourne Cup.
RBA Governor Philip Lowe confirmed the cash rate would remain unchanged at 1.5 per cent this month, well pleased with the fact that “credit conditions are tighter than they have been for some time, although mortgage rates remain low and there is strong competition for borrowers of high credit quality”.
The credit crackdown has seen conditions in the Sydney and Melbourne housing markets continue to ease and interest rates decline recently “after increasing earlier in the year”.
But experts now believe that the RBA board won’t be pushed to make any move on rates for at least another whole year.
Mortgage broker network 1300HomeLoan managing director John Kolenda said all the signs are pointing to rates staying at the lowest of 1.5 per cent “until next year and possibly 2020”.
RBA Governor Philip Lowe has noted that both Sydney and Melbourne housing markets have eased in recent months. Picture: Peter PARKS/AFP.
He said it had been eight years since RBA last raised rates — on Cup Cup 2010.
“It’s a pretty safe bet that the RBA’s cash rate will stay at 1.5 per cent when the Melbourne Cup is next held in November, 2019 … Lenders have already increased rates out-of-cycle so there is no need for the RBA to do anything.”
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He said the central bank was now just on “a watching brief”Mr Kolenda said while borrowers face a challenging lending environment, they should not be afraid to look around for the best home loan deal.
“Home loan customers should never be complacent,” he said.
“You should always be looking for the best home loan deal and lenders are competing aggressively for your business, particularly if you have a lot of equity. Contact a mortgage broker to make sure you are getting the best terms possible and save money.”
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