The Reserve Bank of Australia has left the official interest rate unchanged at 0.25% since it reduced it last on the 20th March 2020.
There have been calls by some economists to lower it further, even into negative territory, but I think that is unnecessary and dangerous. I am even concerned that they are too low now.
Many people forget that although low interest rates may be good for borrowers and business, it is catastrophic for investors and retirees that rely on interest income for their livelihood. Australia has always been a traditionally high interest rate country, so these levels are a cultural change in our society and it remains difficult to predict what impact they may have to our behaviours.
As long as rates remain low we can adjust to a “new norm” but I have concerns that this may be temporary and we may return to higher points sooner than later which may catch some people unexpectantly as they had hoped rates would stay low forever.
It is a critical time for you to review your lending options, assess the merit of fixed rates which are extremely attractive and ensure you have the most cost effective loans available to your circumstances.
Our professional Finance Brokers are available to assist you assess your current lending and compare with the alternative packages available, so email finance@smats.net to arrange your free review.
With rates this low, it is an opportunistic time to enter the property market as an owner or investor, so make sure you find out what is possible for you at this moment in time.
