RBA lift rates to 7% but beware of refinancing too soon!
Australian homeowners have been slugged with another 25 basis point rate increase today as the Reserve Bank of Australia (RBA) lifted the official cash rate to 7.0%, forcing many struggling homeowners closer to foreclosure. Today’s rate rise – the 11th consecutive increase by the RBA since 2002 and the fourth increase in just over a year – pushes Australia’s cash rate to 7% – a 12-year high.
In his announcement, Governor Glenn Stevens pointed to “significant inflation pressures” as the main driver behind today’s decision.
“CPI inflation on a year-ended basis picked up to 3% in the December quarter, with underlying measures around 3½%. This was a little higher than was expected a few months ago,” he said.
“In the short term, inflation is likely to remain relatively high and will probably rise further in year-ended terms, though the Bank expects it to moderate somewhat next year.”
Despite the rate rise, some experts are recommending consumers take their time before a knee-jerk refinance. “It worries me when lenders hold back on matching the RBAs rate rises, so people should hold off shopping around for about two weeks unless youre thinking of moving to a fixed rate which is not a good option at the moment.” Said Michael Lee, consumer services, Mates Rates Mortgages. More….