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ABC News: Home loans and interest rate considerations

Each month (except January), the RBA Board meets to decide monetary policy moving forward. In February, the RBA Board maintained the cash rate at 0.10%. Cash rate changes influence other interest rates in the economy, affecting the behaviour of borrowers and lenders, economic activity, and ultimately the rate of inflation. 

Importantly, in the minutes of the February monetary policy meeting, there was a slight amendment (an addition) to the RBA’s previous commentary around housing prices and home loans—highlighted in bold below:

Housing prices had risen strongly over the preceding year, although the rate of increase had eased in some cities. Housing credit growth had been strong over 2021. Members [RBA Board Members] continued to emphasise the importance of maintaining lending standards and borrowers having adequate buffers”.

This addition is a potential signal by the RBA Board of an upcoming change to the cash rate, and the subsequent potential impact it will have on borrowers. In this video, Alan Kohler discusses his thoughts on the RBA Board and the cash rate, coupled with several considerations for borrowers regarding home loans and interest rates.

In this ABC News video, Alan Kohler discusses his thoughts on home loans and interest rates.

 

Published by WMP Financial Knowledge Centre March 15, 2022