Cash rate cut to 1.5%
Posted on: 03.08.2016
Reasons for the cut?
The RBA has considered many of the influences on consumer spending at the moment. From the dramatic uncertainty of the US presidency to unstable markets in the EU following Brexit, as well as the Turnbull Government remaining in power. The RBA has cut the cash rate by .25% from 1.75% down to 1.5% in a bid to try and provide some stimulus for our economy and increase consumer spending.
Who will be affected?
It’s good news for home owners as well as first home buyers that are looking to get their first property. With record low interest rates, we should see some great incentives and home loan packages from lenders and banks over the next month. Making it a good time for the younger generation to scrape together that deposit and secure a record low fixed rate.
It’s not just home buyers that will benefit either. Home owners will also benefit from the cut (pending their lender passing on the full discount). Below are some examples of the approximate savings for house holds with the following loan amounts.
| Loan amount examples | Likely decrease in repayments |
| $150,000 | $31.25 per month |
| $250,000 | $52.08 per month |
| $350,000 | $72.91 per month |
| $450,000 | $93.75 per month |
| $550,000 | $114.58 per month |
| $650,000 | $135.41 per month |
Summary
If your a home owner, or a first home buyer it may be a good time to keep an eye out on the offers from banks and lenders over the next month or so.
Things to consider as a current home owner:
- Contact Uprosper regarding Refinancing – While transferring from one lender to another can be time consuming, reviewing your loan structure and lender could save you thousands of dollars each year.
- Negotiate with existing lender – By letting your current lender or bank know you are shopping around for other deals, it can encourage them to discount your current rate or fees.
- Keep up existing repayments – If you do achieve a cheaper rate, maintain your usual repayment amounts (as opposed to paying the new lower minimum repayment) as this will help you pay off the loan quicker and save you on interest over the life of the loan.
Things to consider as a current home buyer:
- Gather Deposit – Shop around for better savings account options. Interest rate cuts also means cuts to returns from your savings accounts and term deposits. Make sure you find one optimized to your needs.
- Contact your local Uprosper broker – Get help navigating through all the lenders for a deal that is optimized to benefit YOU, not the banks.
Best of Luck,
The Uprosper Team
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