Record low rates continue for at least another month, with the Reserve Bank of Australia leaving the cash rate on hold at 2.5 percent for the eighth consecutive board meeting (9 months).
It’s now 267 days with the cash rate kept on hold – the longest period without an RBA change since November 2011, according to financial comparison website RateCity (www.ratecity.com.au).
Alex Parsons, CEO of RateCity.com.au, warned consumers against becoming complacent in a low-rate environment and to use this time to be smarter with money.
“We’re at record low interest rates so over time they are only likely to go up so make sure you can afford to withstand some increases in interest rates,” he said.
“The second thing is we’ve heard a lot from the government in the recent few weeks around the prudent budget and so that is going to hit people in the back pocket I would suspect.”
Parsons added that there are a few strategies to keep personal finances in check.
“You need to do one of two things; either increase income, which is really quite hard, or decrease expenses,” he said.
“On the decrease expenses, one of the easiest ways to do that is to really look at your finances to work out where you are paying and where you can get a better deal.”
RateCity database of more than 1000 home loans shows that the average basic variable interest rate is now 5.15 percent, with rates from 4.54 percent. Switching a typical $300,000 home loan from the average to one of the lowest rates would free up $106 per month, or $1272 in the first year, minus any switch costs.