The Reserve Bank of Australia has slashed the official cash rate today to a new historic low of just 1.5 per cent.
This is the second time the cash rate has been cut this year with the last cut being in May.
So far the Commonwealth Bank has already announced that it will be passing on a portion of the cut (variable rates will be cut by 13 basis points) and no doubt more lenders will follow suit.
The decision to cut rates this month follows weak inflation data, along with low employment figures, a high Australian dollar and global uncertainty.
Property prices have also cooled down of late thanks to tightening of lending criteria by the Australian Prudential Regulation Authority, which has given the Reserve Bank more room to move.
RBA Governor Glenn Stevens said, “The most recent information suggests that dwelling prices have been rising only moderately over the course of this year, with considerable supply of apartments scheduled to come on stream over the next couple of years, particularly in the eastern capital cities.”
“Growth in lending for housing purposes has slowed a little this year.
“All this suggests that the likelihood of lower interest rates exacerbating risks in the housing market has diminished.”
The rate cut will be good news for mortgage holders and those thinking about breaking into the property market, particularly in places like Mudgee where properties are still affordable.
While lower interest rates do make it harder to save for a home deposit, once you get in and start paying down your home loan you can do it much quicker with low rates, which means it’s much easier to own your home sooner.
So if you’re in a position to buy then now is a great time to put your money to good use and start looking at your property options.
Just make sure to shop around to find the best home loan deals, as different lenders will have different home loan packages to choose from.
If you’re looking to buy and take advantage of the lowest interest rates in Australia’s history, then feel free to get in touch with the team at Professionals Mudgee Real Estate.