RBA holds cash rate, as 81% facing financial stress
After almost 12 months of increases, the RBA has hit the brakes to hold the cash rate at 3.60%.
The Reserve Bank of Australia (RBA) is holding the national cash rate at 3.60%, providing some light relief for homeowners.
Today's decision (04 April) follows 10 consecutive meetings of increases (that's every month from May 2022, excluding January when the board does not meet).
In a survey of experts, more than a third predicted the RBA would hold the cash rate.
Graham Cooke, head of consumer research at Finder, said it was the "most divided the panel has been since before the cash rate started to rise".
"More than 85% of economists have expected a cash rate increase every month since June 2022," he said.
Brief reprieve for homeowners
The decision to hold should give homeowners a month without an increase to their home loan rate.
Since last April, the monthly mortgage repayment on an average home loan of $600,000 has increased by $1,111.
According to Finder's recurring Consumer Sentiment Tracker (CST), more and more Australians are struggling with their mortgage repayments.
36% of Aussies surveyed in March said they were struggling with their home loan, up from 24% in May last year when the rate rises first began.
The higher loan repayments are in addition to the higher everyday living costs that Aussies are facing.
The CST shows that only 19% of Australians are 'not at all stressed' with their current financial situation.
Tips if you're struggling with loan repayments
- Review your home loan. Your lender will likely pass on today's rate rise in a week or so. It really helps to know what your rate currently is.
- Check if your current lender has a better deal. Sometimes your own lender has a better deal on its website. The catch? It's for new borrowers, not loyal, existing borrowers. If you call and ask, your lender will most likely match the rate.
- Refinance to a lower rate. If you can't get a better deal with your lender then start looking at rates from other lenders and look for a better deal. Even a slightly lower rate can save you quite a bit. Refinancing is not as hard as you think.
- Find other ways to budget and cut back. While your home loan is probably your biggest expense, see if you can't find savings on groceries, insurance or other big expenses.
If you can't make repayments, talk to your lender. If the rate rises have pushed you beyond your limits completely, talk to your lender. You may be able to negotiate a repayment holiday, interest-only repayments or some kind of hardship assistance scheme.