Cash rate remains on hold whilst economic uncertainty grows due to Delta outbreak

The Reserve Bank of Australia (RBA) has announced it will once again hold the cash rate at 0.1% for September following this month’s monetary policy meeting.

Whilst Australia’s economic recovery had been stronger than expected, RBA Governor Philip Lowe mentioned that recent state lockdowns due to the Delta strain outbreak would most likely result in a contraction of the GDP in the September quarter. The RBA has also predicted potential scenarios for Australia’s economy in response to the impact of recent lockdowns and mentioned that they are prepared to act if situation worsens.

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Impact of Delta and the lockdown on house prices

Writing for, Chief Economist at the MB Fund and MB Super Leith van Onselen predicts that the current restrictions would cause the housing market to fizzle, with a recession being the worst-case scenario.

Mr Van Onselen said that the property boom would end due to falling auction clearance rates and decline in new mortgage applications. Alongside less affordability, increased dwelling construction and century low levels of population growth, he predicts that this could drive prices down. However, he also warns that in this scenario, the RBA will further lower mortgage rates in a bid to support a flagging economy and could perversely add fuel to the Australian property market, extending the price boom.

The next RBA decision will be announced...

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How can I keep my interest rate low?

Whilst borrowers don’t have control of market movements, you can consider a few ways to keep interest rate low:

  • Organise refinancing or pre-approval while rates are still low to strengthen any potential home loan savings.
  • Stay on top of your fixed-term’s end date and be on the lookout for low rates as it approaches.
  • Loyalty doesn’t pay, so shop around and compare multiple home loan products for the best chance of securing a low rate.

Are you ready to compare? Here’s how to get started online:

  1. Select your state and whether you want to purchase or refinance.
  2. After answering a few questions, you’ll be given possible home loan options to start comparing straight away and see if you can potentially save on your mortgage.

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