How low will interest rates go in 2015?

If you’ve been thinking about locking in a fixed-rate home loan then you may want to wait at least a few more months because it’s looking more and more likely that rates will drop by April this year.

The official cash rate has remained at the record-low rate of 2.5 per cent since 2013, but most forecasters agree that interest rates will drop to 2.0 per cent by the end of this year.

One real estate expert, SQM Research managing director Louis Christopher, believes that an interest rate cut will be on the cards if banking regulator, APRA, imposes investor-lending restrictions this year.

“They will do this in an attempt to reduce risky, speculative investor behaviour, particularly from those who should not be taking on large amounts of housing debt due to their limited capacity to pay it back,” Mr Christopher said.

“However, if APRA does move, it could potentially open the way for the Reserve Bank to make rate cuts, possibly more than the standard 25 basis points.”

Mr Christopher predicts an interest rate cut by April 2015 and a second reduction, possibly in June.

Not everyone agrees with Mr Christopher however, with the Commonwealth Bank recently stating that they believe the Reserve Bank will remain on the sidelines for 2015 so as not to hurt business confidence.

We will have to wait and see but even if there isn’t an official interest rate cut this year it is always worth chatting to your lender to see if you can make any savings on your current loan.

Are you hoping for an interest rate cut this year?

For those who are hoping to take advantage of low interest rates and want to buy a home in Mudgee this year, you can check out local properties for sale at professionalsmudgee.com.au.

 

Source: www.rpmonline.com.au

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