Those of you that have been keeping close to the financial news lately will have noticed that last Tuesday the Reserve Bank of Australia (RBA) decided to keep rates on hold. That marks the 18th consecutive month of rates being on hold and marks the longest run of inaction in 22 years.
What a great time to be a property owner… interest rates are at record lows and they’ve been that way for ages. So everyone should be enjoying these exceptionally low rates, right?
Well referencing a fantastic article from Eryk Bagshaw at SMH (link below) mortgage rate payments have increased at the fastest rate in 7 years, despite the fact that the RBA have not raised rates from this record low.
He observed based the figures from the Australian Bureau of Statistics (ABS) where cost of living data the interest charges on mortgages for employed Australians rose 4.5% since last year. That is more than double the rate of inflation.
How does that happen?
In all of the changes of the Australian Prudential Regulatory Authority (APRA) over the last year, banks have been changing rates themselves for various different reasons independent of the RBA, and the general direction of these changes is not down.
Bagshaw also references the findings of a recent Productivity Commission which accused the big banks of gouging loyal customers who were “ripe for exploitation”.
One of the core tasks of what a good mortgage broker should do is not let you be caught in this situation. A good mortgage broker knows where the market rates are at and works with you continuously to make sure that you’re getting a good deal.
Now is the right time to check in with a broker to make sure you’re not paying too much!
Well maybe…. but we can take action to change that!