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Home Loan Market: How Things Have Changed in 12 Months |
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A year ago, home loan borrowers and prospective buyers were doing it tough. The Cash Rate was sitting at a decade high mark of 4.35%, with owner-occupied variable interest rates at approximately 6.10%. Fast-forward 12 months, and the market has eased slightly with the Cash Rate dropping to 3.85% and owner-occupied variable interest rates now available from approximately 5.4%. Repayments were stretching household budgets to the maximum, and many Aussies were scrambling to refinance as fixed-rate terms ended. Whilst cost of living remains a prevalent issue for households, things are finally shifting in borrowers’ favour with the realistic prospect of more Cash Rate cuts to come soon. Inflation was still well beyond the target band in June 2024, with headline inflation at 3.8% and trimmed mean at 3.9%. We can confidently say inflation has now eased, dropping to its lowest level since 2021. ABS data shows headline inflation has now fallen to 2.1%, while trimmed mean inflation has eased to 2.4%, the smallest increase in over three years. With inflation now sitting in the RBA’s target range for six straight months, most market ‘experts’ are predicting a 0.25 basis point cut in July. Refinancing activity is at a record high, with more homeowners switching lenders to take advantage of better deals. On a $500,000 home loan over 30 years, repayments have reduced by over $200 per month. If you haven’t reviewed your loan in a while, now could be a great time. Rates are trending down, fee options are changing, and competition between lenders is absolutely heating up. We’re here to help you with your lender, at any time. If you have a question, please a Bernie Lewis Home Loans broker know. |
