July update: Reserve Bank leaves cash rate at 2.75%
Australians are being urged to make their financial New Year’s resolution about saving more money, after the Reserve Bank of Australia’s decision to keep the cash rate on hold at its July board meeting today.
The official cash rate will remain at the record low rate of 2.75 percent for the second consecutive month.
Alex Parsons, CEO of RateCity, said that while borrowers can save money by keeping their repayments high, most borrowers can save significantly more by comparing their home loans online and switching to a better value deal.
“Since the Reserve Bank began cutting the cash rate in November 2011, many borrowers have taken advantage by keeping their repayments high. There is no doubt that you can save a lot of money by doing this but many borrowers may not realise that there are even bigger savings out there by choosing a better value home loan.
“For instance, if you have a $300,000 home loan and kept your repayments at the November 2011 interest rate level, you would have saved about $4,400 in interest charges and you would have over $3,500 in surplus savings.
“With interest rates on hold and the start of a new financial year, it is a great time to make a New Year’s resolution to make your money work harder,” said Mr Parsons.
According to RateCity, the average variable rate is currently 5.62 percent but there are 192 home loans which offer cheaper rates than this average. Variable rates are starting from 4.74 percent and compared to the average rate of 5.62 percent, could be a saving of about $163 per month or $58,640 over 30 years.
“Use the new financial year to plan for a better deal. If you have a home loan, compare your home loan at RateCity.com.au and consider switching or renegotiate with your lender. If you don’t have a home loan, use RateCity to find a good value deal.
“There’s even more opportunity to save this financial year by reviewing your other financial products like transaction account, credit card, savings account and insurances. There’s no point waiting for the Reserve Bank and your lender to offer you a discount when you can switch to better deals and save even more.”