|Against the backdrop of concerns over the global economy and weak consumer spending at home, the Reserve Bank opted to keep interest rates on hold today 4.75 per cent.Many economists have tipped the Reserve Bank will now stay on the interest rate sidelines for at least a year and that if there is any movement, it will be down – but only if there is a sudden major shock to the economic outlook.
“Today’s decision will certainly be welcomed by those with a mortgage,” says Domain.com.au property expert Carolyn Boyd. “An increase in rates would have added unwelcome pressure for people trying to pay their mortgage. Households are becoming increasingly penny conscious – as can be seen by the recent spike in savings – and it really is true that every dollar counts.”
Rates have been on hold since the Reserve Bank surprised borrowers with an increase on Melbourne Cup day last November.
Each 0.25 per cent interest rate rise adds another $60 to the monthly cost of an average Australian mortgage.
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.