Commentary after yesterday’s decision to hold the cash rate is once again surrounding the amount of lenders increasing their own rates.
The reserve bank announced it was keeping the cash rate at a record low of 1.5%, as it has done since August 2016.
Mortgage Choice chief executive officer Susan Mitchell said, “There are a number of factors in the Australian economy that may have influenced the RBA board’s decision to continue to hold the cash rate.
“According to the Australian Bureau of Statistics (ABS), the unemployment rate is sitting at 5.4% and headline inflation is 1.9%, which is below the Board’s target range of 2-3%.
“Further, the Westpac Consumer Sentiment survey found that while consumer sentiment rose in June, pressures on household budgets such as slow wage growth, declining house prices and rising petrol prices are taking a toll on the sentiment results.
“The RBA may have the official cash rate on hold but we are increasingly seeing lenders make small out of cycle rate increases due to a mix of factors including wholesale funding costs, macroprudential regulation changes and tightened lending policies.”
1300HomeLoan managing director John Kolenda said, “Borrowing capacity for consumers has dropped up to 30% over the past quarter and the borrowing parameters vary by lender, making it very challenging for borrowers to understand how much they can borrow and from whom.
“Cost of funding issues has forced some lenders to increase the rates of some home loan products by more than 30 basis points, while other lenders play a wait and see game under the spot light of the Hayne Royal Commission, but they have the same pressure to increase rates out of cycle.
“The expert guidance of an experienced mortgage broker has become more important than ever for consumers in the current environment. There is no reason for home owners to be mortgage prisoners and that is where brokers come into their own helping clients.
“They can guide new home loan customers through the more stringent application process and enable existing mortgage holders to secure the best terms and interest rates through their access to a wide variety of lenders.”
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