One of the key indicators of future movements in official interest rates is the Australian Interbank Futures market, which is where the financial markets trade based on their expectations of future economic activity. Up until late December this market was indicating that there was a 40% chance of a cut to official interest rates in February. However, after the impact of the Australian bushfires along with the global uncertainty brought on by increased tensions in the middle east, the likelihood of a rate cut increased to around 65% during the past week.
Another indication of the likelihood of a February rate cut came in Bloomberg’s monthly survey of economists in December. This regular ‘checking of the pulse’ of financial forecasters surveyed 22 economists around the country, with 18 of them predicting that the RBA would cut Australia’s cash rate to 0.5 per cent next month.
Of course, it is important to remember that any further cuts to official interest rates are unlikely to have a major impact on the local property market, with most home buyers seemingly taking the fact for granted that the cost of their home loan is at record lows and likely to remain there for quite some time to come.
Don’t forget that no matter who you bank with, it is always advisable to speak to an experienced, independent mortgage broker before you lock in your next home loan. Not only can they help you find the best deal, (often from sources that you may not have heard of), but they can also ensure that your loan includes a variety of features that best suit your lifestyle and future plans.
If you need a referral to a trusted mortgage broker, or you simply need some up-to-date advice on how to make the most of the opportunities that the current property market is providing, feel free to call our helpful team at Barry Plant Thomastown on 9466 3233.
Barry Plant Thomastown