Finder’s RBA Survey: Borrowers left wanting following shock rate decision
In a surprise move, the Reserve Bank of Australia (RBA) left the cash rate on hold today.
In this month's Finder RBA Cash Rate Survey™, 34 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
Just 12% of experts (4/34) correctly predicted the outcome, keeping the cash rate at 3.85%.
Graham Cooke, head of consumer research at Finder, said today's decision would not be popular.
"There is still a portion of homeowners who are in severe mortgage stress doing it tough.
"It's soul-crushing when you think relief is coming only to find that you need to wait another couple months.
"Cut or not, there is still a significant difference between the average and lowest rate available. You can potentially give yourself nearly 2 rate cuts by getting on the front foot and switching," Cooke said.
The four experts who correctly predicted the hold cited good inflation figures and a stable economy.
Tim Reardon from the Housing Industry Association explained, "Unemployment is still low and the RBA will prefer to see the official quarterly CPI data at the end of July."
Cameron Murray from Fresh Economic Thinking said CPI is in the target band and there weren't any sudden changes to key economic metrics.
Andrew Wilson from My Housing Market noted, "Current rate settings have achieved a balance between growing consistency in maintaining the RBAs inflation target and a strong economy reflected in a robust and resilient labour market."
Nalini Pr from UNSW Sydney said she thinks the RBA will "wait and see what happens in the next quarterly CPI before making any decisions about the path of interest rates."
Experts share their advice for Aussies under mortgage stress
One in three (34%) homeowners say they struggled to pay their home loan in June, according to data from Finder's Consumer Sentiment Tracker (CST).
Finder asked panelists to share their advice for those who are under mortgage stress.
Here's what they had to say:
Matt Turner, GSC Finance Solutions: "Speak to your bank/broker. There are things that can be done to assist you - hardship provisions are one option, restructuring debt, setting budgets, even looking at selling/downsizing debt to make things more comfortable."
Stella Huangfu, University of Sydney: "Review your budget and look for areas to cut back so you can redirect funds toward your loan. If you're on a high interest rate, consider refinancing or speaking to a mortgage broker to explore better options."
Mark Crosby, Monash University: "If at all possible keep ahead of mortgage payments - the house is likely to be the biggest investment that you will ever make, so every payment is increasing your wealth and reducing your future obligations."
Nicholas Frappell, ABC Refinery: "Rates appear to be trending lower so try to hang on."
Shane Oliver, AMP: "Have a chat with the bank as they can probably help, consider switching to interest only for a while, but otherwise try and hang in there as rates will likely fall further."
Nalini Pr, UNSW Sydney: "Talk to your bank and see what areas of spending you can pull back on."
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