All the experts in finder.com.au's latest RBA survey predict the cash rate will hold tomorrow... Less than one in three Aussies understand comparison rates...
Cash rate to hold, loan sizes to soar: survey
The official cash rate is expected to hold at 1.5% at tomorrow’s Reserve Bank board meeting, as all 38 economists and experts surveyed in the latest monthly finder.com.au RBA Survey are in agreement that the cash rate will stay put.
National home loan sizes (the average is $360,000) are also predicted to rise this mortgage season (September to November 2016) as a result of the historically low-interest rate market.
finder.com.au insights manager Graham Cooke says, historically, rate cuts have usually led to loan size increases.
“In the months directly following the last 10 RBA rate cuts prior to August 2016, the average home loan size in Australia increased seven times and the first home owner loan size rose eight times," says Cooke.
“The average increase in first home owner loans was 1.57%, with the most significant increase in June 2016, when loan sizes increased by 3.6% (directly following the May 2016 rate cut).
Less than one in three Aussies understand comparison rates
Australians may be missing out on the best home loans because of lack of understanding around comparing the true cost of different loans, according to a national mortgage survey, commissioned by CUA.
CUA chief operating officer member services, Andy Rigg, said it was a concern that fewer than one in three Australians (29%) understood what was meant by a home loan “comparison rate”.
43% of respondents misunderstood the meaning of a comparison rate and 28% admitted they didn’t know what a comparison rate was at all.
“As a responsible lender, we have a duty to make sure borrowers understand the tools they have at their disposal to find a home loan that best suits their situation. Property buyers need to be careful that what looks like a very low rate doesn’t actually have lots of nasty hidden fees and charges,” Rigg said.
“Comparison rates are useful in helping property owners choose the most suitable rate for existing and new home owners by looking behind the headline interest rate to also factor in fees and charges.”
The official cash rate is expected to hold at 1.5% at tomorrow’s Reserve Bank board meeting, as all 38 economists and experts surveyed in the latest monthly finder.com.au RBA Survey are in agreement that the cash rate will stay put.
National home loan sizes (the average is $360,000) are also predicted to rise this mortgage season (September to November 2016) as a result of the historically low-interest rate market.
finder.com.au insights manager Graham Cooke says, historically, rate cuts have usually led to loan size increases.
“In the months directly following the last 10 RBA rate cuts prior to August 2016, the average home loan size in Australia increased seven times and the first home owner loan size rose eight times," says Cooke.
“The average increase in first home owner loans was 1.57%, with the most significant increase in June 2016, when loan sizes increased by 3.6% (directly following the May 2016 rate cut).
Less than one in three Aussies understand comparison rates
Australians may be missing out on the best home loans because of lack of understanding around comparing the true cost of different loans, according to a national mortgage survey, commissioned by CUA.
CUA chief operating officer member services, Andy Rigg, said it was a concern that fewer than one in three Australians (29%) understood what was meant by a home loan “comparison rate”.
43% of respondents misunderstood the meaning of a comparison rate and 28% admitted they didn’t know what a comparison rate was at all.
“As a responsible lender, we have a duty to make sure borrowers understand the tools they have at their disposal to find a home loan that best suits their situation. Property buyers need to be careful that what looks like a very low rate doesn’t actually have lots of nasty hidden fees and charges,” Rigg said.
“Comparison rates are useful in helping property owners choose the most suitable rate for existing and new home owners by looking behind the headline interest rate to also factor in fees and charges.”
