Reserve Bank of Australia chief Philip Lowe said the coronavirus is having a ‘significant’effect’ on the country’s economy
Australians having a rough time dealing with rising costs will heap a sigh of relief in 2025 as Canstar said that major banks such as Westpac, NAB, ANZ, and Commonwealth Bank of Australia (CBA) are expected to lower their cash rates from February to May, which will help borrowers save big.
It is projected that CBA will undergo the most cuts, with four reductions resulting in a $358 reduction in monthly repayments for a $600,000 loan by the end of 2025. By the end of 2025, Westpac is expected to reduce monthly repayments by $357 due to four cuts, News.co.au reported.
However, Canstar’s Sally Tindall cautioned that Australians with mortgages not to rely solely on potential RBA rate cuts in 2025. Instead, she advises taking proactive steps to reduce interest rates.
“If you have a mortgage, don’t just cross your fingers and hope for the best,” Ms Tindall said.
“Get on the front foot over summer by knocking down your interest rate as far as possible, either by haggling or refinancing.
“That way, when RBA cuts do finally come you can have your cake and eat it too.”
To ease the financial burden to some degree, the Australian government passed a Help to Buy program in November for first-time homebuyers with lesser incomes. This program was rolled out to help up to 40,000 homebuyers into the real estate market with reduced down payments and mortgage payments.
Because of the robust job market and low unemployment, the RBA is unlikely to lower interest rates after Christmas. The RBA finds it difficult to control inflation at 2-3%. Young Australians’ homeownership is impacted by interest rate policies, which might have a big impact on the housing market, reported The Sydney Morning Herald.
“While it does nothing to put a lid on property prices, which is typically the biggest hurdle for first-home buyers, it gives low- and middle-income Australians the ability to own at least part of their own home while limiting the amount of debt they take on,” Tindall said.
