Experts predict a significant mortgage rate cut in July, with around 88% of economists surveyed by Finder anticipating a reduction in the Reserve Bank’s cash rate to 3.60%. If the banks choose to pass on this cut, homeowners with a $500,000 mortgage could save approximately $1,613 annually, while those with $1 million mortgages may see savings averaging $2,269 monthly, translating to $3,226 each year.
Graham Cooke, Head of Consumer Research at Finder, emphasised that further rate cuts would restore confidence among mortgage holders, who have been eagerly awaiting additional relief after two previous reductions. He noted that as inflation continues to decline, the Reserve Bank of Australia (RBA) is likely pressured to implement the cut while banks face societal demands to fully pass on the benefits to consumers.
Matthew Peter from QIC investment firm echoed this sentiment, stating, “a July cut is in the bag,” citing falling underlying inflation and lacklustre consumer spending as indicators supporting the potential decrease in rates.
Expectations do not stop with July; many experts continue to predict further cuts in August, with over half suggesting additional reductions could occur in November as well. This projected trend reflects a broader view of economic conditions, where a rate cut could have significant implications for mortgage affordability and consumer confidence across Australia.
It’s essential for potential borrowers and existing mortgage holders to stay informed, as these developments could markedly affect their financial situations. However, it is important to remember that the information provided is general and should not be taken as personalised financial advice; individuals are encouraged to consider their unique circumstances before making any decisions based on this information.