What next for interest rates?

Thursday, February 18, 2010

Although the Reserve Bank of Australia surprised many by maintaining the official interest rate at 3.75%, home owners should prepare for future rate rises.

Yesterday, the formal minutes of the RBA’s February meeting revealed the decision to maintain rates was closely contended. According to the minutes, interest rates will require adjusting (namely increasing) if the economic climate continues to improve.

By merely returning rates to "neutral", the official interest rate will need to rise by 1%. That means the average home loan will accrue an additional $250-500 by the end of the year.

Happy Savings!

Dave Kaplan. 

 

« OlderJanuary 29, 2010 Interest rates set to rise as inflation continues to soar
March 5, 2010 Newer » Demystifying Inflation & the Interest Rate

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