No time to rock the rates boat

THE Reserve Bank of Australia (RBA) should resist rocking the interest rate boat while there are so many stormy conditions to navigate including lenders lifting their own rates independently of the RBA, the United States-China trade war and the fallout from the Hayne Royal Commission, says mortgage broker network 1300HomeLoan.

1300HomeLoan managing director John Kolenda said it will be no surprise to see the RBA stay on the sidelines and keep official rates at the all-time low of 1.5 per cent until well into next year and possibly longer. Although, he said there is an underlying fear if things deteriorate any more the central bank might have to cut rates to stimulate a heavily burdened consumer confidence issue.

"This is certainly no time for the RBA to contemplate lifting rates as they have to help navigate us through these uncertain times," Mr Kolenda said.

"There are many factors pointing to the RBA maintaining the cash rate at its present low for the long term. There are some good signs for the domestic economy with low unemployment and signs of more first home buyers getting back into the market.

"But the royal commission findings due next year and other elements such as the US-China trade war, downward pressure on the property market and the federal election looming could all influence consumer confidence in a negative way, troubling our economic conditions.

"Lenders have already raised their rates out-of-cycle. If the RBA followed suit that would only be detrimental to consumer confidence in a falling housing market."

Mr Kolenda said while borrowers continue to deal with a tough lending environment, there is still strong competition among lenders for their business.

"My main message to home loan customers is to never be complacent about your home loan and become a mortgage prisoner," he said.

"You should continue to look for the best home loan deal. Seek the expert assistance of a mortgage broker to make sure you are getting the best terms possible and save money."