At its first Board meeting for 2017, the Reserve Bank of Australia announced it would leave the official cash rate on hold.
Today’s decision marks the sixth consecutive month that the official cash rate has been left on hold at the historical low of 1.5%.
Speaking about the Reserve Bank’s announcement, Mortgage Choice mortgage broker Scott Partridge said it was “safe and unsurprising”.
“Amidst a lot of domestic and global uncertainty, it wasn’t surprising to see the Reserve Bank of Australia take the safe option and leave the official cash rate on hold,” he said.
“According to the Westpac Melbourne Institute of Consumer Sentiment, confidence is broadly the same as it was last month – which is significantly down from the highs we have seen in previous months.
“At the moment, pessimists significantly outweigh the number of optimists. In addition to the lacklustre confidence readings, Australia recently recorded its lowest annual inflation rate in 19 years.
“Data from the Australian Bureau of Statistics found the December quarter inflation result was just 0.5%, while the yearly price growth was just 1.5% – far below the Reserve Bank’s 2% – 3% target band range.
“All of these factors combined gave the Reserve Bank of Australia all the incentive it needed to leave the official cash rate on hold for another month.”
Moving forward, Mr Partridge said future rate adjustments cannot be ruled out.
“Nobody knows what the future will bring. Depending on what happens both here and abroad, the Reserve Bank could really decide to do anything with the cash rate,” he said.
“While the future is uncertain, one thing is clear: rates are currently sitting at near-historical lows, which is great news for existing property owners and potential property buyers.”
Mr Partridge said anyone who is concerned about the future, should take the time to review their current financial situation and make sure they are in the right products for their needs.
“If you have a mortgage and are worried about the future, it may be worth considering your fixed rate options,” he said.
“Of course, anyone who is thinking about reviewing their financial situation should take the time to speak to their local mortgage broker.”
If you want to learn more about your home loan options, call 02 9653 9333 or visit www.mortgagechoice.com.au/scottpartridge
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This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.
About Mortgage Choice
Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs. Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional. Since that time, the company has grown and developed into a fully fledged financial services provider. Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance. Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.
Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA). Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC. Recent recognition: 2014 Australian Broking Awards Best Diversified Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchisen list; 2010 Forbes Asia-Pacific Best Under A Billion list. Visit www.mortgagechoice.com.au or call customer service on 13 6678.