Surfing the summer rate cut wave
The December decision will likely be welcomed by first-home buyers and home loan holders alike as it will allow them to take advantage of low rates until the end of summer.
Australian Associated Press has noted that with the Reserve Bank not due to meet again until February, consumers will be able to relax a little over the summer and will have time to take advantage of the 4.25 per cent base rate.
“The board saw a need for the reduction in the cash rate – and bank lending rates – to be large enough to have a noticeable effect on financing decisions of lenders and borrowers,” the Reserve has said, explaining its decision.
However, Bank governor Glenn Stevens did not rule out an early meeting in January, which could bring rates even lower and pave the way for more low-interest home loans.
Elsewhere, the Australian has suggested that home loans may well carry the torch on the road to economic recovery and prevent a full-blown recession.