Rate cuts are coming. But don’t get over-excited.

By Graeme Salt

Rates are coming down – but probably not as fast as we would like!

Australia is tipped to record the second-highest inflation rate out of 42 countries next year.  And as a result, the Reserve Bank is tipped to keep interest rates higher than other Central Banks.

The good news is that a healthy economy is one reason our inflation rate is so high.

Australia has one of the strongest jobs markets in the developed world with employment growth hitting a 16-month high.  Plus, the rate of workforce participation has reached a record.

More than 64,000 people found jobs in September, the Australian Bureau of Statistics said this month.

Savvy home borrowers are asking themselves what they can do given that rates are not likely to come down till February 2025 at the earliest (and then by not as much as many might like).

The first option must always be to talk to your existing lender – you’d be surprised at how rates can tumble when you threaten to break up with your bank.

But sometimes, your existing bank can’t or won’t come to the party.  Here there are two options:

• Look at a refinance.  For borrowers with an exemplary repayment record, you’d be surprised how some banks can make things happen to welcome a new customer
• Think about fixing.  Seeing the writing on the wall, some lenders have now cut rates on more than 300 fixed mortgages.  This could ease the cash-flow burden for those struggling with rates that are high – and will remain so for a while!

Graeme Salt is an award-winning mortgage broker. For a no-obligations consultation on your home loan needs please contact Graeme on 02 9922 5055