The Reserve Bank of Australia Board has announced a hold on official interest rates, which still sits at an all-time low of 2.25%.
Last month’s cut was a welcome boost to the Australian economy. As mortgage holders see a drop in their minimum monthly repayment, many are choosing to use this time to their advantage by paying more, effectively shortening the term of their loan.
In fact, AMP Chief Economist Shane Oliver says that the average person who “…already (has) a mortgage are choosing to pay it off as quickly as they can.” Australian home loan customers are, on average, 24 months ahead on their mortgage repayments.
Low interest rates boost mortgage lending
As well as current mortgage holders, investors are also cashing in on last month’s cut. In February, Westpac recorded a 10% lift in home loan applications since the last rate cut.
For homeowners, particularly those in capital cities, there’s more good news. Data released by CoreLogic RP Data reveal that the average capital city home prices increased by 0.3 per cent last month, taking the annual rise to 8.3 per cent.
Adding to this, the recent update that Australian consumer confidence has risen 2.4% in the past fortnight. So it seems that 2015 is set to be a bumper year and with interest rates set to stay low for the foreseeable future, now more than ever is the time to enter the property market.