RBA cuts rate to 0.75%

Caught tail end of global recession talk on the radio today heard many economists are calling it atm. Crikey , and with our rates where they are first time ever by miles , damn .
The only comfort is most economists usually miss it all so if they're calling it now hopefully their usual runs true and we don't get one.

 

Recessions happen in the rest of the world every few years or so.. it's not that uncommon, and on past events Australia escapes relatively lightly.

However a true recession in Australia is very uncommon (given the last 30 years or so), so I'd be more worried about that... Still, next RBA steps could be quantitive easing, so there are still options available .

Problem is every time rates come down, house prices go up in Sydney and Melbourne but little else improves significantly nationwide...so the old model is broken.

Maybe it's time to look at a new model, quantitative easing for the banks to be able to offer business and personal loans at very low rates?

 

But don't forget what you've already saved - it'll probably balance out in the end. People always look at what they're losing right now, and forget to appreciate what they saved in the first instance

 

I renegotiated my rates just before this cut and got them to 4.24%. With this cut I’m now at 3.99%.
So your only .2% above me. So your about 12months in front.
In 12 months time we will be level which leaves you 1-2years out of the money.

I would expect rates to drop a bit more soon. Then start to lift again.

I don’t think you’ll be too far out of the money at the end of 3years.

 

With the cut I’ll be at 3.27% with full offset for primary

 

You’re right and I’ve been secretly consoling myself with that fact without doing the sums...also on the plus side I’ve got another $800k coming off fixed in early 2020 which is at 4.59% and I’m sure I will get a much better rate there although it may revert to P&I.

 

Does anyone know what AMP is doing with this round of RBA rate cuts ? I haven’t been able to find anything

 

The AMP banking app has a headline "our interest rates are currently under review".

They have usually taken a while to confirm what they are doing based on the other most recent rate cuts..

 

HSBC briefing documents have the end of year $A at 63c....... when i was first told this a few months ago.....i said not a chance - now im not so sure

(well good for us here in the USA .....but bad for Australia).

 

Im in a similar boat in that i only have 5% variable so this 0.15% drop from two lenders only makes us $380 a year discount.

This said......most of our mortgages have been fixed at a 4% average for 3 years.......so looked smart 12 months ago.

The important thing with fixed mortgages is you can sleep at night and you know what your expenses are going to be for the next X number of years etc.

 

Why? you have been ahead of the game over the last 3 years.

 

I believe he fixed earlier this year, so 30months to go.

 

We are decreasing the interest rates on all variable rate home loans and line of credits by 0.15% pa.

 

Correct

 

ING

 

not bad for Australian export and tourism industries

 

Agree. Will be interesting to see if any additional mining projects get started up or if they feel its a short term blip.

 

Consumers not buying it as confidence crashes amid tumbling interest rates

 

Firstmac - effective 17/10/19