As of November 2024, the Reserve Bank of Australia (RBA) has held the cash rate steady at 4.35%, a key factor influencing home loan interest rates, which directly impact the cost of your mortgage.
At Ausfirst Lending Group, we’re here to guide you through the implications of the interest rate update in Australia on your mortgage strategy. This page provides a comprehensive look into what the cash rate is, how the RBA sets it, and how it affects home loan rates. You’ll also find insights on average mortgage rates, tips for navigating the loan market, and an overview of lenders offering home loans, equipping you with the information you need to make well-informed financial decisions.
The cash rate, determined by the RBA, is the interest rate banks impose on each other for short-term “overnight loans” – quick loans that allow banks to balance their daily cash needs. This rate influences various interest rates across the economy, including mortgages, personal loans, savings accounts, and term deposits. By adjusting the cash rate, the RBA aims to manage inflation, employment, and overall economic stability. When inflation is high, for instance, the RBA may increase the cash rate to curb spending; when economic growth is needed, it may reduce the rate to encourage borrowing.
Home loan interest rates typically follow the cash rate’s direction, affecting how affordable your mortgage can be. When the cash rate is low, lenders often reduce their rates, making your monthly repayments more manageable and appealing, whether you’re an existing homeowner or a first home buyer. However, when the cash rate rises, mortgage rates typically follow suit, which can lead to higher monthly costs. Even a small shift in the cash rate can significantly impact long-term loan costs, so staying informed on these updates helps you make better mortgage decisions.
At Ausfirst Lending, we know that every interest rate update in Australia can impact your mortgage strategy and financial plans. Our team of mortgage brokers stays up-to-date with the latest changes in Australia’s rates, providing you with timely guidance to adjust your mortgage accordingly.
With insights into options like refinancing your mortgage or choosing the right rate structure, we ensure you’re prepared for any market shifts, helping you maximise your mortgage’s potential while staying within budget.
Let Ausfirst Lending support you in making confident, informed choices that safeguard your financial future.
Loan purpose | Outstanding loans (% per annum) | New loans (% per annum) |
---|---|---|
Housing (Table F6) | ||
Owner-occupier | 6.08 | 6.26 |
— Principal-and-interest | 6.04 | 6.19 |
— Interest-only | 7.00 | 6.97 |
Investment | 6.44 | 6.49 |
— Principal-and-interest | 6.38 | 6.41 |
— Interest-only | 6.61 | 6.61 |
Business (Table F7) | ||
Small business | 7.42 | 7.25 |
Medium business | 6.28 | 6.21 |
Large business | 5.81 | 5.57 |
a) Includes loans at variable and fixed interest rates
Sources:
ABC News: The Debate on Lending Restrictions and First Home Buyers
Stay informed on how these economic decisions impact your financial landscape.
At Ausfirst Lending Group, you are our top priority. We are dedicated to providing comprehensive assistance from start to finish, not just because we are legally obligated to act in your favour, but because we genuinely want to ensure your success.
We focus on your objectives and requirements, and combine deep industry knowledge with a strong commitment to finding loan options that truly align with your financial needs. We simplify the entire loan application process by assessing your borrowing capacity, organising documentation, and negotiating terms on your behalf, all while securing the most favourable outcomes for you.
While some financial services may come with hidden fees, working with us ensures you won’t pay out of pocket for expert advice. Our service is free for you because we receive compensation directly from the lenders, allowing you to focus on finding the best loan without worrying about additional costs. We maintain transparency throughout the process, so you always know where you stand.
One of the key benefits of working with Ausfirst Lending is our access to a diverse range of lenders. Instead of presenting just one option, we assess a broad array of options to secure a loan tailored to your financial needs. This extensive selection allows us to tailor solutions that match your specific goals and circumstances, ensuring you get the best possible outcome.
Our knowledge of the property market in Brisbane is unparalleled, and we have been helping residents buy property for years. Our mortgage brokers in Brisbane aren’t just professionals; we’re local experts who understand the intricacies of the area’s property market. This local knowledge means we can provide insights and advice that are particularly relevant to your situation. Additionally, our connections in the industry may help you access special discounts or benefits, giving you an edge when securing a loan.
A “good” interest rate depends on current market conditions and the type of home loan you’re considering, such as fixed or variable. Generally, a competitive rate is one that is lower than the national average, which tends to fluctuate with the Reserve Bank of Australia (RBA) cash rate. As of recent months, variable rates for owner-occupiers are around 6-7%, but individual rates may vary based on factors like your loan type, credit profile, and deposit amount. Comparing rates among lenders and understanding your financial goals can help you find a rate that works best for you.
Current mortgage interest rates in Australia vary by lender and are influenced by the RBA’s cash rate, which is 4.35% as of October 2024. Most variable interest rates for owner-occupiers sit between 6% and 7% due to recent cash rate changes, while fixed rates depend on the chosen term, often ranging slightly higher for longer fixed periods. To find the most accurate rate for your situation, check with your lender or review current rates on comparison sites, as they reflect real-time changes across the market.
The RBA cash rate serves as a guide for lenders when setting their home loan rates. A high cash rate often leads to higher mortgage interest rates, making repayments more costly. Conversely, when the cash rate is low, lenders typically lower their mortgage rates, making borrowing more affordable. However, lenders also consider factors like funding costs and competition, so the cash rate isn’t the sole factor affecting home loan interest rates.
Deciding between a fixed or variable rate depends on your financial situation and goals. A fixed rate locks in your interest rate for a set period, giving you predictable monthly payments, which can be beneficial if you expect rates to rise. A variable rate, however, fluctuates with the cash rate, potentially offering lower costs when rates are down but higher payments if they increase. Many borrowers opt for split loans to balance both options, with part of the loan fixed and part variable.
To secure a lower interest rate, you can consider refinancing your loan, especially if current rates are lower than what you initially signed up for. A larger deposit or better credit score can also help you qualify for a lower rate. Additionally, comparing rates across lenders, considering loan features like offset accounts, or opting for a shorter loan term can reduce the total interest you’ll pay over time.
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