The Reserve Bank has left interest rates on hold at its June meeting.
This should come as little surprise after the May rate cut. The majority of bank economists greed that the RBA would take a ‘wait & see’ approach to the effect of the cut.
If you’re interested in finding out which banks passed on the cut visit our Summary of Variable Rate Changes page.
We have extracted the key points from the RBA media release below.
Inflation has been quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.
Continued low inflation is good news for borrowers. If inflation continues to hold, it gives the RBA the ability to make further rate cuts.
Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. Dwelling prices have begun to rise again recently.
The main segment under target from bank policies is lending to overseas borrowers. Across the board banks have made it more difficult for overseas borrowers by:
Taking account of the available information, and having eased monetary policy at its May meeting, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and inflation returning to target over time.
At this stage a number of bank economists are tipping another rate cut later in the year. The Reserve Bank has left the door open for future cuts but it’s unlikely to occur at the next meeting (which will be held just after the Federal Election).
If you’re not happy with what your lender did after the May rate cut it may be a good time to consider your options. We would be happy to advise you on which home loan would be suitable for your situation. Just get in contact with us about our obligation-free mortgage broker service.