10 things to know about the current interest rate

Property enthusiasts are no doubt gearing up for the results of the RBA meeting at 2.30pm today.

In the meantime, we look at the things that you should know about interest rates and the current environment.

Here are 10 things you should know:

1. The current interest rate is 2.5%.
   
   
2. It’s at a historical low.
   
   
3. The low interest rate is being called one of the primary reasons that affordability was recently recorded at the highest level in a decade, according to the HIA-CBA Housing Affordability Index.
   
   
4. Interest rates haven’t been changed by the Reserve Bank since this time last year, August 2013, when it was reduced by 0.25%.
   
   
5. Prior to this, the historical low was 3% in April 2009, which lasted until a 0.25% hike in their October 2009 meeting.
   
   
6. In August 2012, the rate was set at 3.5%. In August 2011, it was 4.5%.
   
   
7. In the last 25 meetings where changes were seen (taking us to 8 August 2007), 11 were increases of 25 basis points, nine were decreases of 25 basis points, three were decreases of 100 basis points, one was a 75 basis point decrease and one was a 50 basis point decrease.
   
   
8. In RBA governor Glenn Stevens’ last meeting minutes (July) he noted that the most prudent course of action is a period of interest rate stability. HSBC's Paul Bloxham has said that a change in language in upcoming minutes is the factor to keep an eye out for.
   
   
9. Low interest rates and rising property prices have seen international economists predicting a ‘property bust’.
   
   
10. Just two experts in a recent panel from Finder.com.au expect interest rates to increase by the end of the year… however, the majority expect increases next year with a “new normal” of 4% expected.

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