The Reserve Bank of Australia (RBA) has delivered a welcome Melbourne Cup windfall to homeowners and the domestic economy with today’s decision to cut official interest rates, says leading mortgage broker Loan Market.
Loan Market Chief Operating Officer Dean Rushton said the central bank lowering the cash rate from 4.75 per cent to 4.5 per cent should save someone with an average mortgage of $300,000 around $50 a month.
Mr Rushton said lenders passing on the RBA’s rate cut will provide consumers with additional spending power in the lead up to Christmas.
“We certainly welcome and appreciate the RBA’s move today after 12 months of rates staying on hold,” Mr Rushton said.
“The extra savings will help many families struggling with the increased cost of living and should result in retailers enjoying a better Christmas than they may have envisaged a few months ago.”
Mr Rushton said it was a positive to see the RBA respond to the ample evidence for a rate cut.
He said home loan approvals had fallen 5.2 per cent for the year to August, 2011, according to the latest Australian Bureau of Statistics (ABS) data.
“The last 12 months have been the most challenging the home finance sector has experienced in the past decade,” he said.
“But it has been encouraging to see some growth in the number of finance commitments in recent months and we’re certainly starting to see some activity return to the market which an interest rate cut should boost.”
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