Phew. We’ve survived another start of the month Reserve Bank meeting without having to reach into our pockets and hand over more hard earned cash to the bank in the form of higher interest payments. The Reserve Bank met on Tuesday and decided, as many experts had tipped they would, to keep the cash rate at the same level for this month, and possibly another two or three months. And that’s good news for anyone with a mortgage or those of you looking to jump into a home loan in the near future.
The Reserve Bank noted that the housing market has slowed down a little – the April figures for residential building approvals were down – so despite retail sales figures going up, the bank decided on balance that the economy would be better served by keeping interest rates on hold. This makes a lot of sense, especially when some of the statistics are broken down – for example, the jump in retail sales was not as significant as it sounded, because most of the increase in sales was for essentials like food. The economic crisis taking place in Europe, led by Greece’s financial problems, were apparently also a factor in the Reserve Bank decision, as they cited that this uncertainty contributed to them deciding to leave rates as they were for the time being.
Banks and credit unions responded unanimously by saying that their home loan interest rates were not under review. It would have been pretty cheeky if they had decided to start increasing rates again, with so many increases over the past year or so, but it sure is nice to have it confirmed that the interest rate on our mortgages will stay the same for at least the next month and possibly longer. That makes budgeting a lot easier and being able to afford the odd luxury a bit simpler too.