LYNTON FINANCIAL SERVICES PTY LTD T/AS AUSSIE MORTGAGE MASTERS

CALL US -1300 666 186

BORROWERS BANKING ON FEBRUARY RATE CUTS

Tuesday, April 26th, 2016

Borrowers are anticipating yet another rate cut when the RBA meets next week, echoing the sentiments of most economists.

A Loan Market survey has found two-thirds of respondents believe the Reserve will once again take the knife to rates when it meets on February 7. Thirty-nine per cent are forecasting another 25bp cut, while 27% expect a deeper 50bp cut. Loan Market COO Dean Rushton said still more needs to be done to stimulate the economy following the RBA’s successive rate cuts at the end of last year.

“The RBA lowering rates in November and December last year was an appropriate course of action which was a welcome relief for borrowers and struggling sectors such as retail, but there are no signs of an improvement in the current global economic environment, particularly the volatile situation in Europe. While the fundamentals of the Australian economy remain quite strong and consumer sentiment has improved, sections of the economy can benefit from the stimulus provided by more interest rate cuts,” Rushton said.

The question remains, however, whether an RBA cut would see immediate benefits for consumers. NAB chief executive Cameron Clyne has added to the chorus of bankers flagging bank inaction following the next RBA cut, telling radio station 3AW there was “no correlation” between the RBA cash rate and the bank’s cost of funds.

by ADAM SMITH – AUSTRALIAN BROKER NEWS

Author: Lynne Cox

She is a Mortgage Broker and holds an Australian Credit Licence # 365386. She has been involved in the Mortgage Broking Industry since May 1996 but has been involved in small business since 1977. Lynne is a licensed finance broker. She was the President of the Finance Brokers Association of Australia until March 2004 where she is now a Life Member, and she was also a Member of the Finance Brokers Supervisory Board until it disbanded in October 2003.