Looking for a Silver Lining in 2021?
The RBA keeps on delivering in the form of an historically-low cash rate of 0.10% (down from 0.25% back in October 2020). They’ve slashed the rate – and are keeping it there – to help bolster our national economy as we navigate the continued impacts of the pandemic.
RBAs governor, Philip Lowe says the rate cut is intended to “support job creation and the recovery of the Australian economy from the pandemic”.
What does this mean if you’ve got a home loan?
Well, hopefully your lender will pass the low cash rate on to you and you’ll pay less interest on your loan. While interest rates aren’t everything, a lower one is something you can leverage to:
- Pay back your loan sooner, or
- Reduce your fortnightly repayments
How likely is it that lenders will pass the savings on to you?
It depends. Some smaller, more agile lenders have already passed the rate cut on in full to their existing customers on variable interest rates. Whereas the Big 4 – ANZ, Commonwealth, NAB and Westpac – have announced changes to their fixed rate loans only (for new customers).
One thing is for sure: the home loan market is more competitive than ever. If your lender isn’t playing nice then it’s time to reassess your position. Complete our home loan health check to find out if you’re paying too much on your home loan.