GLITTER Strip borrowers could have more than $20,000 back in their pockets after the Reserve Bank of Australia cut interest rates to an all-time low of 1.25 per cent.
The cut from 1.5 per cent to the official cash rate was welcomed by Gold Coast heavyweights.
Ray White Surfers Paradise chief executive officer Andrew Bell said the cut alongside the Coalition’s federal election win would create stability in the real estate market.
“It gives people a sense of where the market is going,” he said.
“They now know the government policies for the next three years and they get a sense that interest rates will remain low for some time and these are good signals for the marketplace.
“This is the perfect climate to enact your buying needs.”
The average home loan size is $384,700, according to the Australian Bureau of Statistics (ABS).
Finder.com found the cut could lead to savings of almost $700 per year, or almost $21,000 across a 30 year loan.
CoreLogic head of research Tim Lawless echoed Mr Bell’s sentiments and said it would further boost the property market.
“The move by the RBA to cut rates was widely expected and no doubt the focus will now turn to mortgage rates — how low will they go?,” he said.
“Mortgage rates for owner occupiers are already around the lowest level since the 1960s and lenders are generally expected to pass on most, if not all of the cash rate cut to mortgage interest rates.
“Lower mortgage rates, together with the likelihood of lower borrower serviceability assessments if Australian Prudential Regulation Authority (APRA) delivers on a relaxation to the base serviceability rate later this month, as well as renewed confidence following the federal election, are likely to see an improvement in housing market activity.”
Gold Coast Central Chamber of Commerce president Martin Hall said the cut would allow locals to further enjoy the live, play, work approach of the city.
“Anything that makes the art of doing business easier for small and medium businesses, or any business on the Coast, is welcomed,” he said.
“In the lead up to what will be an interesting state election, focus on business is as important as ever. Now is the time for small businesses to have a big voice.”
The Commonwealth Bank (CBA) and the ANZ were the first of the big four banks to announce reductions to its rates after yesterday’s announcement by the Reserve Bank.
The CBA said it would pass the cut on in full, and the ANZ said it would reduce its variable rates for owner-occupier and investor loans by 0.18 percentage points from June 14.
Homeowners with a $500,0000 mortgage will save an extra $73 a month if their bank passes on the full cut.
Treasurer Josh Frydenberg said the interest rate cut and lower income tax could benefit two-income families to the tune of $3000 a year.
Source: pacific.epeak.in