This week, the Reserve Bank of Australia announced that the Cash Rate for December 2023 will remain the same as last month’s announcement- 4.35 per cent. In November, the Cash Rate was increased by 25 basis points from the previous month. With 4.35 per cent as our baseline for the end of 2023, Australians can take a short sigh of relief in what is traditionally the highest spending month of the year across the nation.
The RBA advised that their decision to freeze the Cash Rate for the end of 2023 was based on allowing time to assess the impact of the previous rate increases this year. It is always a high priority for the RBA to return inflation to an ideal target- high inflation creates for a diminishing society. Savings erode, budgets in households are affected, and businesses typically suffer in all industries. For this reason, the RBA intends to monitor inflation levels, and adjust the Cash Rate accordingly. In simple terms, these decisions are made with the notion of “short term pain, long term gain”, it just so happens that the “short term” has spanned over some years now.
Previous cash rate hikes do present a promising landscape for our economy. Prospectively, opportunity for our economy to thrive and emerge is on the horizon if mortgage holders can continue to push through these turbulent times. It has been recognised that managing cash flow and expenses does pose challenges for most households, especially for those juggling a multitude of financial commitments (personal loans, car loans and business loans).
Experienced Financial Advisor, Andrew Mills from Compass Financial Solutions states “it is evident we are experiencing a turbulent time with interest rates. We think 2024 will see the easing of interest rate increases in Australia that have already started occurring in the US and other developed economics globally. We also expect a return to an economic growth phase by 2025 following the anticipated interest rate drops in 2025. Traditionally with Australia following economic shifts of other larger nations, consumers hold their breath for a sign of long term reprieve after promising signs globally.”
Having a conversation with a knowledgeable mortgage broker and financial advisor is beneficial to gain insights into interest rates, a multitude of home loan products, and how to approach the fluidity of our current economy. It’s also important to stay informed on cash rate announcements, lender and bank product promotions, and available cashback offers. It is timely to consider a ‘home loan health check‘, especially given the cash rate has now been frozen for December. Home loan refinancing poses several different options to ensure you benefit in the best ways possible. Options can include equity releases which allow for home renovations, assed upgrades, and release of cash for a variety of expenses. Your mortgage broker will break down the benefits of a home loan refinance, and will discuss tailored options suited to your unique scenario.
Don’t let the unknown concern you, team up with a home lending specialist to evaluate which option is the best home loan for you. With low interest rate home loans, and flexible repayment options, you could be in a much more comfortable position financially after an obligation-free assessment from our team. We walk you through the process every step of the way, including having interactive discussions with the use of home loan repayment calculators to ensure you fully understand what your next commitment will look like.
Give the Fox Home Loans team a call today on (07)3505 3099, or have us call you.
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Paige grew up in a small town in rural NSW. Upon finishing school, she started as a Personal Banker at ANZ Bank.
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