Rates rise but opportunity exists for savvy borrowers

Wednesday the 4th of November, 2009 1 Comment »

Posted by Iden Money .

Probably the safest bet that anyone could have placed on Melbourne Cup Day was on the rate rise by the Reserve Bank. As expected by most people, the Reserve Bank of Australia increased their interested rate – this time by 25 basis points. With this rate rise, the new official cash rate is now 3.5 percent.

On average, borrowers can expect to pay an extra $45 on a $300,000 mortgage as a result of yesterday’s rate hike.

However, industry experts warn that a few more rate rises are likely to occur by early next year or earlier by the end of this year, pushing the cash rate from 3 percent – the lowest in over 40 years in the middle of this year to up to 5 percent by the end of next year.

Housing Industry Association’s chief economist Harley Dale said this rate rise for the second month should not make a large material difference to the housing demand. According to the HIA, figures show that sentiment towards buying new homes would start being affected when mortgage rates start hitting the 10 year average of 7.25 percent.
 
As per a recent speech by treasury secretary Dr Ken Henry, Australia has been the best economy to recover from the recent global crisis and is the only one hitting positive growth among all advanced economies of the world. This once again emphasises the resilience of the Australian economy.

Iden Money considers that for anyone contemplating buying property there won’t be a better time due to continued low interest rates, high rental demands and the apparent signs of the recovery of the Australian economy. From first home buyers to investors, opportunities exist in the present market to do a good deal.

Iden Money can help you provide the best solutions for your mortgage needs with its wide range of products and team of experienced loan writers. Not only do we have lots of options to choose from, our rates have consistently been lower than the major banks in Australia.

If you are thinking about a home or investment loan, talk to us now. Call our friendly team on 02-8844 8989 or complete the quick enquiry form on our website.