The RBA announced this past Tuesday that the Cash Rate was staying at 0.10%, despite many media outlets painting a doom and gloom picture about rate rises, killing the dreams of Australian homeowners.
But is that true?
On one hand, yes, the rates will eventually. We know this. We’ve known this for a while so it shouldn’t come as a surprise.
In fact, the RBA has been committed to keeping rates low, especially during the pandemic, to help Australians and stimulate the economy’s largest industry, the $9 Trillion-dollar Residential Property Market.
Previously stating they will not raise the cash rate till at least April 2024, but Tuesday’s announcement showed they’ve now updated that date and brought it forward to Late 2023. This is because another measurement they were watching was our inflation rate which is currently at 2.1%.
And as you can see below, we are within the threshold for an increase but it again will be some time.
But how much will this affect your mortgage repayments?
Well, if you have a $1,000,000 mortgage, you’re looking at around $120 – $140 extra per week per 1% increase. And remember when interest rates go up, affordability goes down which means more people are forced to rent and rents increase.
Again, this is a general exercise but if you want to know more about your current situation, how to prepare for the worst and what we can do to help you Pandemic-Proof your future then get in contact on 1300 522 562 or email team@jrprosperity.com.au
When considering an investment property with positive cash flow, it is important to make sure it is suitable for your specific financial goals and objectives. Remember to do your due diligence and if you need advice; JR Prosperity Partners can help you decide if this is the best strategy for you. Edit
