'Tis the season to be making higher repayments
In its last official cash rate decision until February 2010, the Reserve Bank of Australia has increased the rate by 0.25 percentage points for a third consecutive month, to 3.75%.
If not for the emergency-low levels reached earlier in 2009, this would be the lowest cash rateAustralia had experienced in 42 years.
Regardless, the country’s last official interest rate move for 2009 will be sure to disappoint those who are still adjusting to the increases experienced in October and November. Once lenders pass on the December rise, the average variable rate mortgage holder will be paying around $150 more per month than they were when the cash rate was at 3%.
Local Mortgage Choice franchise owner Tony Fornaro said, “The average home loan amount inAustralia is almost $270,000. Someone with that loan over 30 years at a 6.25% variable interest rate will see an additional 0.25 percentage points increase their repayments by over $44 per month or just over $10 per week.”
“The Mortgage Choice 2009 Consumer Sentiment Survey, completed in November, indicates the vast majority of mortgage holders can easily handle this, which is a relief given the economy still has a long way to go before it nears a full recovery. The latest rate rise will be a test, as we look to festive season spending from Australians and the businesses they own to contribute to the country’s economic health and vice versa.
“Our respondents with mortgages were asked what rate increases they could afford on a base of 6%, and 40% said they could afford an increase of more than five percentage points before they would need to consider selling their property. That means well over one third of our respondents could afford repayments at 11%.
“Impressively, 17% said they could afford ‘any’ increase. At the lower end of the scale, 14% could afford an increase of four to five percentage points, 13% between three and four points, 15% between two and three, and 6% between 1.5 and 2 percentage points. 6% said they would consider selling after any new rate rise.
“The Reserve Bank’s next official cash rate meeting is not until February next year, so hopefully the next two months provide a reprieve in repayment increases for mortgage holders.”
Visit Tony’s website at www.mortgagechoice.com.au/tony.fornaro or call 07 3624 0755.
'Tis the season to be making higher repayments
In its last official cash rate decision until February 2010, the Reserve Bank of Australia has increased the rate by 0.25 percentage points for a third consecutive month, to 3.75%.
'Tis the season to be making higher repayments
In its last official cash rate decision until February 2010, the Reserve Bank of Australia has increased the rate by 0.25 percentage points for a third consecutive month, to 3.75%.
If not for the emergency-low levels reached earlier in 2009, this would be the lowest cash rateAustralia had experienced in 42 years.
Regardless, the country’s last official interest rate move for 2009 will be sure to disappoint those who are still adjusting to the increases experienced in October and November. Once lenders pass on the December rise, the average variable rate mortgage holder will be paying around $150 more per month than they were when the cash rate was at 3%.
Local Mortgage Choice franchise owner Tony Fornaro said, “The average home loan amount inAustralia is almost $270,000. Someone with that loan over 30 years at a 6.25% variable interest rate will see an additional 0.25 percentage points increase their repayments by over $44 per month or just over $10 per week.”
“The Mortgage Choice 2009 Consumer Sentiment Survey, completed in November, indicates the vast majority of mortgage holders can easily handle this, which is a relief given the economy still has a long way to go before it nears a full recovery. The latest rate rise will be a test, as we look to festive season spending from Australians and the businesses they own to contribute to the country’s economic health and vice versa.
“Our respondents with mortgages were asked what rate increases they could afford on a base of 6%, and 40% said they could afford an increase of more than five percentage points before they would need to consider selling their property. That means well over one third of our respondents could afford repayments at 11%.
“Impressively, 17% said they could afford ‘any’ increase. At the lower end of the scale, 14% could afford an increase of four to five percentage points, 13% between three and four points, 15% between two and three, and 6% between 1.5 and 2 percentage points. 6% said they would consider selling after any new rate rise.
“The Reserve Bank’s next official cash rate meeting is not until February next year, so hopefully the next two months provide a reprieve in repayment increases for mortgage holders.”
Visit Tony’s website at www.mortgagechoice.com.au/
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