AMB February Update !!

RBA Wrap up

The Reserve Bank leaves the official cash rate at 4.35% at its first board meeting of 2024 in a move that was widely anticipated by economists as inflation eases.

The Reserve Bank has left its interest rate unchanged for a second meeting in a row, stoking the hopes of Australia’s borrowers that the peak of repayment pain has passed.

“While recent data indicate that inflation is easing, it remains high,” the RBA said in a statement.

“The board expects that it will be some time yet before inflation is sustainably in the target range,” the statement said. “The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out.”

In a subsequent media conference, RBA governor Michele Bullock said the bank’s stance remained “restrictive” and that getting inflation down remained its priority.

“I really understand that the mortgage-holders are sweating on [an early rate cut],” she said. “But the big issue that’s confronting not just mortgage-holders, but everyone, is inflation. And the fact that inflation is so high in so many parts of their lives at the moment is what’s really hurting them.”

Tapas Strickland, NAB’s Head of Market Economics, said there was nothing to signal a rate cut soon from today’s statements, including its updated forecasts report.

“We interpret this as low probability of a cut in H1 2024, but a cut in H2 2024 is consistent with inflation at target by mid-2026 on the RBA’s forecast,” Strickland said.

AMB wrap up

In the broker space we have faith that we are over the slump for any future rate hikes and all down hill from here. (in a good way that is, your interest rates heading back down… finally !!)

From what we are seeing with lenders, they have reduced their fixed rates and slightly on the variable splits.

This is all tracking positively for further rate cuts this year. The sooner the rates are reduced, the better.

For our clients that have fixed rates are up for renewal its important to have that conversation nice and early, so you are prepared for the new repayment once it is no longer locked in.

You need to make sure you have budgeted the difference in the repayment jump so you know exactly what it will cost you each month.

We will also complete our review to ensure your existing structure is the best for you, your goals, and the loan splits, if any as we understand this can change.

If anyone would like to review their mortgage, whether you're an existing client or wishing to join us, we would love the opportunity to assist you!

Please reach out to Abbey on 0498222116 or abbey@ambfs.com.au 

or simply send us a private message.