Reserve Bank will cut the interest rate to 0.1 per cent

Another rate cut is possible, it it's not really going to help anyone. I really don't see lenders passing it onto consumers. Almost no lenders passed on the last cut, including lenders that had written guarantees that they would pass on all rate cuts.

I can't think of a single policy change in the last 5 years that has actually improved people's overall borrowing capacity. Very time there's been some change that has the potential to be useful, it's been offset by something else.

 

Not to worry RBA has still plenty of ammo remaining.

Can you imagine boost to sentiment when media reports RBA slashes rates by 50% in small print (from 0.1% to 0.05%) . Again if required another sensational headline RBA cut rates by another 50% (from 0.05% to 0.025%)

Cheers,
Oracle.

 

As I have said time again, you can improve your borrowing capacity by

increasing income sources that lenders accept ( wages or rent , generally ) or paying down debt

OR

hope for a windfall from lottery or an inheritence... and use it to pay down debt or purchase with - its same same really

OR

hope for a drop in assessment rates ( that's assessment rates, not interest rates) and /or HEMS.

interest rate movements of themselves, don't assist really - and havent since APRA took that out of the banks play books @ 5 years back - except for when they reduced the assessment rate last year and people mistakenly believed that it meant more than it did....

The sugar hits are finished. You need 40 year loan terms or the return of actuals to get material $$$$ improvements now.

Otherwise, assuming no lottery wins or inheritences are coming your way ( how you would you know ???? lol) you can take charge of things and ensure you steer your own ship by

buying some of these



and using the surplus cash flow to do this ...



to become like this guy...



or this guy



instead of this kinda guy ....






and go to bed at night knowing you are like this guy.....



because this is what you have coming your way ...







OR...... don't . But rate cuts aren't going to do it for you

 

General info: When they adjusted assessment rates last year, they removed the requirement for a floor rate but increased the minimum margin from 2.0% to 2.5%.

In practice the increase in margin meant that some assessment rates actually increased. Many banks kept the floor in place anyway. At the same time living expenses went through a routine increase. The result was a net overall reduction in peoples serviceability, again.

What I find odd is HEM indexes should have reduced over the last 6 months (but haven't). Personally I'm spending less on almost everything. My car used to get filled about once a week. Now it's once every 2 months. I make lunch every day instead of buying takeaway.

 

Would brokers know? assessment rates for each bank.

If my Interest Rate is 3%. Bank will assess me on 5.5%.

 

Yes we know. Part of the documents you supply tends to be your bank statements which includes your current rate. In most cases the lenders calculators automatically calculate the relevant assessment rate based on this info. Some of the policies can get quite involved and tricky though.