Steady cash rate has "neutralised interest rates" for homebuyers

Tuesday 19 April 2011

Article by Mozo

People considering home loans may be encouraged by the fact that the official cash rate is being left alone in Australia, according to one expert.

Interest rates 'have been neutralised as a deterrent for house buyers'

The rate was last altered in November 2010 from 4.5 per cent to 4.75 per cent, but has stayed the same ever since, which has reduced the stalling effect of interest rates on would-be property buyers, the Sydney Morning Herald reports.

According to a survey by Loan Market, only 12 per cent of respondents were worried about this issue, while ten per cent were concerned about a potential housing bubble bursting and threatening their investment.

Other problems cited included the high cost of housing.

Loan Market chief operating officer Dean Rushton said: "The Reserve Bank of Australia leaving the official cash rate alone for the past five months seems to have neutralised interest rates as a deterrent (to home buying)."

Meanwhile, Australians were urged earlier this month by Mortgage Choice to compare home loans online to make sure they get the best deal.

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