RBA Rate Cut: What Does It Mean For You?
The history was made at the November 2020 Reserve Bank of Australia meeting, as the board made the decision to cut the cash rate by 0.15 points to 0.1 per cent, making it the rate never-seen-before in Australian history. The Reserve Bank has cut the interest rate for the first time since March, and while the interest rate staying unchanged provided more stability during uncertain times, and now moving towards Christmas it was clear the cash rate was going to be dropped further.
Think of it this way, as lenders and banks decrease their interest rates on mortgage loans, you can get a better deal resulting in you saving thousands on interest. This cash rate of 0.1 per cent, means that the less interest we pay, the more money people have to spend, especially in the lead up to Christmas helping to boost the economy and to keep jobs as a result.
What do these changes mean for you? It could mean different things depending on your circumstances and financial goals, but no matter if you’re a first home buyer, next home buyer or looking refinance, you will be able to enjoy historically low-interest rates as more lenders incorporate the cut into their loans.
CBA and Westpac have already acted on the reductions and lowered interest rates on their loans. CBA’s owner-occupier four-year fixed-rate loan is now at 1.99 per cent, which the bank has never seen in its history. Westpac has also done the same for their four-year owner-occupier rate which dropped to 1.99 per cent. some lenders like ME Bank decided to implement the full cut of 0.15% to all of their existing variable rate home loan customers. More banks and lenders are expected to jump on board in lowering their rates, so you’re in for a treat if you in need of a mortgage loan. Here's how mortgage loan lenders are adapting to the changes.