Rates Set to Fall Further
Monday, 24 November 2008
The Board of the Reserve Bank next meets on December 2 and economists foresee an early Christmas present for homeowners, with interest rates likely to be cut by between 0.5% and 1%. A 1% cut would slash the standard bank variable mortgage rate from about 7.7% to 6.7%, meaning those with a $300,000 mortgage would pocket an extra $200 a month. Since peaking in August at around 9.6%, mortgage rates have tumbled, significantly easing mortgage stress.
While uncertain economic conditions have seen some hold off making decisions, decreased mortgage burdens have meant others are now taking the opportunity to upgrade their family homes. Throughout 2009 those on the search for a home can look forward to excellent buying conditions.
The combination of cheaper mortgages, escalating rents and more affordable house prices will help to stimulate the investment market. Generous government incentives will also see more people make the move from renting to buying.
