The RBA recently lifted its official interest rates by 0.25% taking them to 4.25% effective 7 April 2010. The RBA governor Glenn Stevens indicated Interest rates to most borrowers have been somewhat lower than average. The Board judges that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average.
Declining unemployment rates and inflation and new mortgage approvals for housing have moderated over recent months as interest rates have risen and the impact of large grants to first-home buyers has tailed off we may be seeing the tail of interest rate rises for the short to medium term, all be it subject to global influences. But while mortgage rates are still low by historic standards, an increase may be achieved by not only the RBA increases but if your mortgage company decides to lift its rates of its own accord or beyond official increases as has been the case in the recent past.
So how does this equate to cheap home loans, well it’s called “competition” Banks were loving the global financial crisis as many homeowners flocked to the security of the big banks. I once heard a quote from an ex big bank executive that in order to get the most money out of their customers you would charge them as much as you can without causing them to leave. You could maybe get away with these practices if you only had a few choices, but now competition changes all that, people now have real alternative for cheap home loans.
As the risk of the global financial crisis subsides we are again choosing a cheap mortgage based on interest rates, fees and charges not just security of the lender, this will bring back much need competition.
We may even start to see the big banks not putting their rates up above the official RBA cash rate increases, we may start to see easing of policy allowing more Australians to qualify for a home loan.
So as rates are already historically low and home owners looking to buy property or refinance a home loan together with house prices rising it is a great time to look at your financial situation, many experts are calling this a great time to buy property I tend to agree.
Remember the easiest way to find a cheap mortgage is with our Mortgage Report Card you can find cheap home loans here
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