RBA assistant governor: Mortgage holder interest rates below decade average

Interest rates for mortgage holders are approximately 50 basis points below the decade average, according to the RBA.

Assistant governor Phillip Lowe revealed in a speech in Sydney yesterday (March 25th) that the central bank believed interest rates would move towards "more normal" levels, conceding that the economy had "relatively limited spare capacity", reports the AAP.

Addressing the Australian Industry Group’s tenth annual economic forum, Dr Lowe said: "The important thing is the level of interest rates that borrowers face, not the cash rate. At the moment the mortgage rate is still around 50 basis points below the average for the last decade, so the mortgage rate is getting close to the average but it is still below the average."

He also declared the central bank’s resolve to avoid "significant imbalances" developing in the housing market before adding that the margin on lending rates put in place by banks was a consideration in setting the cash rate, the news provider adds.

Credit Union Australia and AMP Bank recently cut their variable mortgage interest rates as competition between Australia’s leading banks increased.

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