Historically low cash rates and lenders warm to buyers

Historically low cash rates and lenders warm to buyers

 

The Reserve Bank cut the cash rate to a 53-year low of 2.75% last month bringing the cash rate to extreme lows, and finance experts are advising it may be time to consider taking out revolving line of credit and getting serious as we look like we are at the bottom of the property market cycle.

 

Lenders outside of the big banks have one-year fixed rates below 5% and the ANZ went further than the other majors and cut 0.27% points from its standard variable rate, to 6.13 per cent, to match NAB's figure and the Commonwealth Bank has a variable rate of 6.15%

 

These are the standard variable rates and are always negotiable for those with a good credit history, a large share equity in the house and a big mortgage are more likely to be able to negotiate a discount.  But the benefits in controlling your own revolving line of credit looks far better than a standard mortgage according to financial experts.

 

The renewed competition among lenders comes as the housing market remains shows signs of bottoming out particularly in Queensland where it is expected to start lifting in the coming 12 months.

 

If economic indicators show the economy is improving, the Reserve Bank may then increase interest rates to head off inflation and fixed rates could start moving up before the Reserve Bank changes the cash rate.