The Reserve Bank of Australia has provided a Australian families and business with a welcomed boost by announcing the official Cash Rate will drop by 50bp (0.50% p.a.).
The RBA has provided a higher than forecasted rate cut to ensure that the Australian economy will receive a boost despite the fact that Banks are not expected to pass on the full rate cut to their customers.
Two questions to be answered…
Question 1: How will I know how much of the rate cut my Bank will pass on???
Answer: Over the next 10 days the Banks / Lenders will make announcements advising how much of the Interest Rate cut you will receive.
Question 2: How can I make the most of my lower Interest Rate???
Answer: If your budget will allow … resist the urge to reduce your Home Loan repayments. Maintaining your repayments at their current level to reduce your Home Loan faster so you can own your home sooner. OR If your family would benefit more from having more money available to cover your other household expenses … a simple request to your Bank / Lender will enable you to reduce your Home Loan repayments.
