The much anticipated prediction of an interest rate reduction transpired in February with the Reserve Bank of Australia (RBA) cutting interest rates for the first time in over four years – slashing the official cash rate by 0.25% to 4.1%. The news has announced that this will save mortgage owners, but how?
WHAT THIS MEANS FOR YOUR MORTGAGE
If you have an $800,000 home loan, this rate cut could save you approximately $120 per month or $1,440 per year on repayments. This seems like a little amount, however if the RBA continues with a predicted two more rate decreases by the end of the year, the reduction could be a more like $360 per month or $4,320 per year. This would ease financial strain for many homeowners currently feeling the pinch.
WHAT DOES THIS MEAN FOR BUYER ACTIVITY?
Buyer activity has been slower however we should see an increased level of buyers now house hunting again, as lower rates mean higher borrowing power. As interest rates ease, more buyers who had previously held off are now returning to the market, creating increased competition—especially in sought-after areas like The Hills District. If you’re thinking about selling, now could be the ideal time to take advantage of the growing buyer confidence.
WILL PROPERTY PRICES INCREASE?
As borrowing costs drop and more buyers enter the market, property values are expected to rise over the next 12 months. Lower interest rates typically lead to higher demand, which pushes prices up—especially in popular suburbs. If the RBA continues to cut rates, we could see property values increase by 5-10% by this time next year. For sellers, this means favourable market conditions, while buyers may want to act soon before prices climb further.
The property market is ever evolving and now is the ideal time to review your home loan, explore refinancing options, or consider getting into the market before prices rise again.
Contact Carolyn Wheatley, Principal at Belle Property Dural for advice on navigating these changes today – 0407 120 483. Whether you’re a buyer, seller, landlord or tenant, you could take advantage of the opportunities ahead.
