Bet on rates to stay on hold until 2019 Melbourne Cup

CONTINUED economic uncertainty makes it a safe bet that the Reserve Bank of Australia (RBA) will remain on the interest rate fence until at least the 2019 Melbourne Cup, says mortgage broker network 1300HomeLoan.

1300HomeLoan managing drector John Kolenda said all signs point to the RBA leaving official rates at the all-time low of 1.5 per cent until next year (and possibly 2020) with a rate cut now more likely in the long term than an increase. Mr Kolenda said the RBA once had form for getting amongst the action on Cup Day, but it has now been eight years since the central bank lifted its cash rate on the ‘day that stops the nation’, while its last rate change was in August, 2016.

"It’s a pretty safe bet that the RBA’s cash rate will stay at 1.5 per cent when the Melbourne Cup is next held in November, 2019," Mr Kolenda said.

"While there are some good signs for the domestic economy with lower unemployment and more first home buyers getting back into the market, the US-China trade war, housing conditions easing in Sydney and Melbourne, uncertain household consumption and the coming federal election will all influence the RBA to maintain its watching brief.

"Lenders have already increased rates out-of-cycle, so there is no need for the RBA to do anything."

Mr Kolenda said while borrowers face a challenging lending environment, they should not be afraid to look around for the best home loan deal.

"Home loan customers should never be complacent," he said.

"You should always be looking for the best home loan deal and lenders are competing aggressively for your business, particularly if you have a lot of equity. Contact a mortgage broker to make sure you are getting the best terms possible and save money."