RBA cash rate hold: Why Aussies are refinancing in record numbers
As the low home loan rate environment endures, Australian borrowers refinanced $17.2 billion in 1 month.
The Reserve Bank of Australia held the official cash rate at its meeting today. The rate stays at 0.10%.
100% of the experts in Finder's cash rate survey predicted the RBA's decision.
With the official cash rate remaining so low, mortgage lenders are able to set their home loan rates at the lowest levels on record. Australian home buyers and investors are responding by paying huge prices for property.
And Australians who already have home loans are rushing to refinance like never before.
According to the latest ABS statistics from July, over 38,000 Australians refinanced more than $17 billion in loans. This is an all-time record.
Refinancing can take a few hours of your time, from comparing home loans to organising your application and discharging your old mortgage. But the savings can be significant.
The average home loan size for an Australian refinancer in July was $464,570. If you refinanced this amount over 30 years and switched from a relatively high 3.00% interest rate to a more competitive rate of 2.14%, you'd save $209 a month.
- Monthly repayment at 3.00% = $1,958
- Monthly repayment at 2.14% = $1,749
Just 1 in 4 experts in Finder's RBA survey expect the cash rate to increase some time in 2022. RBA governor Philip Lowe said the bank "will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. The central scenario for the economy is that this condition will not be met before 2024."
The world of low interest rates doesn't look to be changing any time soon.