As we head towards Christmas, there is nothing mortgage holders would like more under the Christmas tree than an interest rate cut.
Yet, the Reserve Bank doesn’t look like bringing the goods this Christmas.
When the RBA met this month, they kept the cash rate on hold at 4.35% and essentially ruled out the chances of any cuts in the near future.
Economists are predicting mid-2025 if we are lucky.
So where does this leave borrowers and savers?
Well, it leaves us in the exact place we have been all year.
Earnestly waiting for a cut.
The big banks have started throwing out a few teasers such as lowering rates for new mortgage holders. For instance, this month the rates on NAB’s base variable loan for owner-occupiers and investors paying principal and interest have fallen by 0.40 percentage points, while interest-only rates on this loan dropped by 0.60 percentage points.
Yet this doesn’t help existing mortgage holders with the bank’s standard variable rate remaining unchanged for existing customers.
What options do you as a mortgage holder have?
The rate cuts we are expecting in 2025 will help to stimulate refinancing activity.
Lenders will bend a little further to retain their existing clients and attract new ones.
It is the ideal time to conduct a mortgage review.
When was the last time you reviewed your mortgage?
Does it always get put in the too-hard basket?
With interest rates starting to move, whether officially or non-officially, it is always time for a mortgage review.
A mortgage review will assist you in investigating whether you are benefiting from, or missing out on, interest rate savings.
Once the RBA cuts that cash rate, variable rate cuts will start to flow through from the banks – and it’s time to cash in on the savings.
Alternative options for interest earnings on cash savings
If you have had your funds in a high-interest savings account, you have likely been enjoying great interest earnings.
With decreases in interest rates come lower savings account rates.
It may be time to make an appointment to consider alternate investment options and to ensure the longevity of the income earnings you are accustomed to.
Whether you are a mortgage holder or have your funds tied up in a savings account, get in touch with our team to assess your options, and ensure you benefit from the best deal possible.
