RBA mulled over another rate cut

Before deciding to keep interest rates on hold, the Reserve Bank of Australia (RBA) had weighed up the idea of another cut.

The minutes from the RBA’s meeting earlier this month show that the group saw the merits of both courses of action but eventually decided that easing off now would leave room for manoeuvre in the months to come.

As a result of their decision, typical home loan interest rates remained unchanged, putting an end to the flurry of new home loan deals that have followed previous rate cuts.

However, first-home buyers and mortgage holders may find that their home loan payments come down again in the coming months after indications from the RBA that further cuts are a strong possibility.

The basic interest rate is already at its lowest level in 45 years, with the RBA taking an even 400 basis points off since September and paving the way for a raft of new low-interest home loans to help Aussies struggling during the recession.

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