Good news for mortgage holders this week, with the RBA saying “it’s reasonable to expect an extended period of low interest rates”.
Figures released on Wednesday show that core inflation, the RBA’s preferred measure, is currently at 1.4%.
However, Reserve Bank of Australia (RBA) Governor Philip Lowe says it is highly unlikely the RBA will contemplate higher interest rates until it’s confident that inflation has returned to 2-3%.
“Whether or not further monetary easing (aka further rate cuts) is needed, it is reasonable to expect an extended period of low interest rates,” he said in a speech.
“On current projections, it will be some time before inflation is comfortably back within the target range.”
Will the RBA cut rates further this month?
The RBA will meet again on Tuesday, however it’s appearing increasingly unlikely that it will cut rates for a third consecutive month.
That’s because June quarter inflation figures released on Wednesday narrowly beat out the market’s expectations (+0.5.%) with a rise to 0.6%.
As a result, most experts are predicting that will be enough to postpone a third RBA rate cut to 0.75%, but not enough to prevent it from happening between now and the end of the year.
Get in touch
If you want an update on what the RBA’s latest comments on long-term low-interest rates mean for your current home loan situation, then get in touch.
We’re following the market closely and will be happy to run you through some mortgage and refinancing options.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
