Home owners, small businesses and retailers are the winners from the Reserve Bank’s cut to official interest rates.
The cuts are aimed at softening the impact of the high Australian dollar.
Whitney Angell reports.
Retailers and the real estate industry have welcomed Tuesday’s surprise rate cut to 2.75 per cent.
Banks were quick to respond. Several, including Commonwealth, NAB, and Westpac banks announced within hours, they were passing on the full quarter per cent cut.
Christopher Zinn, One Big Switch: “Thankfully we were spared the mexican standoff of some days waiting to hear from them.”
On a loan of $200,000, it will mean a savings of $31 a month rising to $62 a month on a 400,000 loan.
Banks are encouraging consumers to spend the gain, not save hoping to stimulate the retail sector and housing industry.
For self funded retirees though, it’s more financial pain as they now face lower incomes.
Dianne Chairman, AMP Finacial Planner: “Speaking to your financial advisor is my strong advice to people. It’s great that your kids have got the mortgage repayments down but how about you?”
Economists predict further rate cuts before the year ends, as the Reserve Bank tries to boost growth in the non-mining sectors.
Craig James, Commsec Economist: “We’re calling for another interest rate cut in August after the next inflation figures.”
ANZ mortgage holders are still in limbo.
The bank will make a decision on interest rates this Friday as part of its regular review.
Whitney Angell, QUT News.