Recently, the Reserve Bank of Australia (RBA) announced that the official cash rate has been cut by 25 basis points to 3.60%. (and most experts believe interest rates will drop further in coming months). Importantly, the latest cut has eased the pressure for tens of thousands of Australian households who are juggling a variable mortgage, as well as the effects of rampant inflation in recent years.
At her press conference, The Reserve Bank Governor Michele Bullock made the following statement: “The Board’s now cut the cash rate by 75 basis points since February this year as we’ve become increasingly confident that inflation is on track to be in our 2 to 3% target range on a sustainable basis. Because the price level has gone up so much during the period of high inflation from 2022 to 2024, households are still feeling the pain of those higher costs. This is why we’re so determined to keep inflation down.”
The Reserve Bank Governor then went on to say the following: “Monetary policy remains well positioned to respond to shocks that could come our way, and the Board will keep doing what it needs to do to keep inflation down and maintain a healthy jobs market because. As we know, when inflation is low and stable and people can get jobs it’s good for households, it’s good for the community and it’s good for the broader Australian economy.”
Clear as mud, right? Ok, let’s get to the real nuts and bolts.
WHAT DOES IT MEAN FOR YOUR MONTHLY HOME LOAN REPAYMENTS?
Well, it depends on the size of your home loan, assuming you’ve signed up for a variable home loan rate. Of course, if you’re on a fixed rate home loan, then nothing changes whatsoever. (But then you can’t have it both ways).
Let’s look at a few scenarios. If you have a mortgage of $700,000, over 30 years, this rate cut will save you $109 a month, or around $1,300 per year. When combined with the previous two rate cuts, this means you will save about $330 a month, or about $4,000 per year.
If your mortgage is $400,000, the new rate will save you $57 a month. Or around $684 per year. If the rate cut drops another 0.25%, then you’ll save $112 per month.
Fingers crossed, we see more rate cuts in the coming months.
Here at C & R Settlements in Mandurah, we’re renown for our hard work, attention to detail, and going the extra mile for our clients. We’re Mandurah’s Number One independent settlement agent with over 80,000 settlements under our belt (and still going strong).
As an added bonus, when you choose C & R Settlements, you can use our free courtesy truck when it’s time to make the move. All you’ll need is a standard driver’s licence (and perhaps a few strong mates to lend a hand on moving day). Just be aware that our free courtesy truck is very popular, and bookings are essential. Just another reason to make the move to C & R Settlements in Mandurah.
For details, call us on 9581 2148. Or email mandurah@crsetts.com.au