Home loan rates could fall below three per cent

Monday 24 November 2008

Article by Mozo

The market could be flooded with low interest home loans next year as experts forecast further base rate slashes.

According to the Australian Associated Press, analysts have surmised that the rate could fall as low as three per cent by April, which would take it to its lowest level since 1960.

Meanwhile, home loan customers could be in for more immediate relief as experts forecast a rate cut of 125 basis points next month, which would make be the biggest attack seen since 1990.

In such a scenario, consumers could see their monthly home loan commitments fall considerably, while the move could also pave the way for more competitive personal loans and cheap credit cards.

Many major banks have rushed to pass on the rate cut announced earlier this month.

The decision was made as Reserve Bank board members reflected on gloomy housing and consumption data.

However, the Bank did take some confidence in the fact that the dramatic falls in home loan approvals seem to have abated in recent weeks.ADNFCR-1761-ID-18892459-ADNFCR

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