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Record Low Rates

PPG_Blog_August_article 1_record low interest rates 

Most major and minor lenders have passed on a 0.25% cut to their mortgage rate following the latest Reserve Bank of Australia’s (RBA) board meeting. This equates to around $44 less per month on an average $300,000 home loan.

The Reserve Bank slashed the nation’s cash rate to a record low of 2.5%. “In Australia, the economy has been growing a bit below trend over the past year. This is expected to continue in the near term as the economy adjusts to lower mining investment,” said RBA governor Glenn Stevens.

Mr Stevens also added that the Australian dollar remained “at a high level” despite losing about 15% of its value since early April, and welcomed a further depreciation of the exchange rate to encourage a rebalancing of growth in the economy.

Economists weren’t surprised by the RBA’s decision to drop the cash rate and many predict another cut sometime later this year.

This most recent rate cut is the third since late last year and puts the rate at its lowest level since 1960. The major banks have been quick to pass on the rate cut in full. No doubt all Australian households currently paying off a mortgage will be pleased with this latest news.

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