Many predicted that interest rates would be on the move in October, although some had held their prediction back to November, and sure enough… interest rates rose today by 0.25% from 3% to 3.25%. In a statement issued today, Reserve Bank Governor Glenn Stevens cited lower unemployment and solid housing credit growth as among the reasons for the increase. He said the “risk of serious economic contraction in Australia [had] now passed”. (more…)
Fixed rates are generally a good indicator of which way the banks are thinking interest rates will move in the future, since banks have to set their rates to make some sort of profit during the course of a fixed rate period. Interestingly, we’re now seeing majority of banks hiking fixed rates up, under the radar. (more…)
Just to keep you up to date, four other banks, Suncorp Metway (SUN), St George (StG), Westpac (WBC) and ANZ, have decided to follow the lead of the Commonwealth Bank (CBA) and pass on some, but not all, of the rate cut. Each of them dropped their interest rates by .1%, while the NAB refused to pass on any of the rate reduction. For reference the standard variable rates with each bank are as follows:
ANZ: 5.81% Effective 17th April
CBA: 5.64% Effective 17th April
NAB: 5.74% Continuing
StG: 5.79% Effective 17th April
SUN: 5.8% Effective 20th April
WBC: 5.81% Effective 20th April
The last of the 100% products has been taken off the shelf. RAMS and St George (BankSA) were the last remaining lenders offering 100% loan products to the marketplace, and they have announced that those products will be discontinued. RAMS is effective immediately, while St George will still be available until the end of next week (Thurs 9 April). (more…)
It is being widely reported by economists around the country at the moment that the Reserve Bank (RBA) are preparing to cut interest rates in just a few short weeks when they meet again on September 2.
While there are mixed feelings about just how much of a cut we’ll see, it’s a relatively unanimous call from economists across Australia that rates will be cut in September. However, the talk is that the Banks, who are always quick to pass on any rate rise, may see this as an opportunity to increase their profit margins by not passing on the rate cuts to their customers.
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This is a very common question being asked at the moment, and the common answer that is going around is “funding”. It’s all well and good to say “funding” but what exactly does that mean to you and I? Where do they get their funding from? Why is it costing them more if the RBA aren’t increasing interest rates? How can they increase rates and then post a 9% increase in record profits???
I’m going to try and answer all these questions and more, right here right now!
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