A leading Illawarra mortgage broker doesn’t expect a change in interest rates to occur this year – at least given current conditions.
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The Reserve Bank of Australia kept interest rates on hold for the whole of 2018 following the decision to keep rates at 1.50 per cent at its December meeting.
With interest rates at historically low levels, RAMS Home Loans Illawarra principal Matthew Clark believed it was currently uncertain “what the next move will be, up or down, and also when it will be”.
“That probably means that for the next little while that we’re going to see some stability,” he said.
“With the Sydney market coming off and other markets usually following, the pressure to increase rates has eased on that front as well.
“I can’t see there being a change in either direction for some time. In terms of what the next change will be, it’s probably more (likely) an increase than a decrease, but the timing for when has been pushed out quite a bit.”
Although he didn’t expect to see a change in 2019, that was based around “what we’ve got right now”.
He said while some economists were predicting increases in 2019 – perhaps even multiple increases – he thought these predictions were starting to wind back somewhat.
“But things could change so quickly; it only takes a good or bad run in a few results in the economy to change that overnight,” he said.
“But from what we’ve got in front of us right now, I think it’s steady as she goes for a little while.”
Mr Clark’s advice to Illawarra home owners was that “everyone is different… there is no set advice for everybody”.
“There are pros and cons to both, but the one thing fixing does is it always provides security, and you know where you’re going to be for a set period,” he said.
“There are a lot of factors in play, not just the economy. If people are concerned, they really should get some advice, and fixing might be a good solution for them.”
The RBA cut interest rates by 25 basis points in August 2016 as well as in May 2016. There were no changes to interest rates in 2017 and 2018.
The RBA will next meet on Tuesday, February 5.
However, in contrast to the Reserve Bank, Westpac, ANZ and CBA all announced last year that they would increase their standard variable rates.