Mortgage holders who had hoped for RBA cash rate cut should consider refinancing

The decision by the RBA board to keep the cash interest rate at 3.5% has not come as a big surprise. 

While many home buyers had hoped for further relief in terms of repayments, the global economic climate and our own markets here had suggested that there would not be a further cut just yet. 

On reflection, we have seen moderate growth in China, some growth in the US and some reassuring movements in the European financial markets, which would stand to reason not to cut the rate further. 

While our labour market remained strong – even recording a slight growth despite job cuts in some industries – and business credit on the increase, the RBA’s decision to keep the interest rate steady is understandable. 

Home owners who had hope for another cut should look at refinancing as an option, especially if their property is financed with a fixed-rate loan. Bear in mind the availability of more flexible loans that allow switching back and forth between fixed and variable rates. These loans may be the best suited in order to make the most of the already low rate and be able to make the most of any future cuts.

 Robert Projeski is a leading property finance expert and the founder and managing director of Australian Mortgage Options. He has appeared on radio and TV and written extensively on property and finance matters.

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