Rate cut a sure thing on Cup day

Rate Cut a Sure Thing on Cup Day

Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance) wrote for The Western Weekender ahead of the November 2020 Melbourne Cup, calling an RBA rate cut with confidence and spelling out what it would mean for home loan holders across the country.

At the time, the official cash rate sat at 0.25 per cent, already a record low, and leading economists were broadly expecting the Reserve Bank to cut again to 0.10 per cent at its Cup Day board meeting. The RBA had held off in October, in part to avoid overshadowing the Federal Budget’s announcement of nearly $50 billion in business and personal income tax cuts. But since that October meeting, RBA officials had been signalling their intent clearly, with Governor Philip Lowe committing to keeping rates low for at least three years and flagging further quantitative easing measures.

Mark’s practical focus was on what this meant for borrowers. For those who had come off COVID-19 repayment deferrals and resumed mortgage payments, another rate cut was a welcome development, though how much of it reached them would depend on how much their lender chose to pass on. His broader point was consistent with advice he had given throughout the year: regardless of RBA movements, mortgage holders should always be looking at whether they are on the most competitive rate available to them.

For anyone still sitting on a variable rate starting with a three, the message was the same as it had been for months. Contact your lender, ask for a better rate, or work with a broker who can put the pressure on or find a better alternative.

Getting proactive about your home loan rate is one of the most straightforward financial decisions you can make. Contact Evolve Lending & Finance to see what you could save.