Reserve Bank Interest Rate Announcement
Mortgage holders got what they were hoping for today – a stay on interest rates.
The Reserve Bank decided to keep rates on hold at 4.75 per cent despite recent news that inflation was running higher than expected.
“It’s great news that the Reserve Bank has decided to wait and see whether the higher inflation is temporary thanks to recent disasters and seasonal factors, rather than attacking it with an interest rate rise,” says Domain.com.au blogger Carolyn Boyd. “Households are already facing increased living costs and will be grateful they don’t have to dig even deeper into their pockets – for another month at least.”
The official interest rate is now 4.75 per cent. Mortgage holders on variable interest rates are being charged a standard variable rate of about 7.83 per cent by their lenders.
Boyd says mortgage holders should always try to pay extra off their loan to give themselves a buffer in case rates do rise. You can wipe 17 months off the average new mortgage and save $30,085 in interest by paying an extra $60 per month, or about the equivalent of a 0.25 per cent rate rise.
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