After a surprise interest rate rise on Melbourne Cup day, the Reserve Bank has delivered mortgage holders some relief today by deciding to keep rates on hold until at least February.
The decision comes on the back of economic data out last week showing that the growth in the Australian economy has fallen behind many of the world’s advanced economies. Consumer data out last week also showed the biggest drop in retail sales since July 2009.
Today’s move is good news for mortgage holders who have had to cope with the higher rates imposed by last month’s official rise coupled with the decision by several lenders to lift their own rates by more than the Reserve Bank’s recommendations.
Each 0.25 per cent interest rate rise adds another $50 to the monthly cost of an average Australian mortgage. The official interest rate is now 4.75 per cent. Mortgage holders on variable interest rates are being charged a standard variable rate of about 7.83 per cent by their lenders.
Rates will now remain on hold until at least February, as the Reserve Bank takes a break in Janaury.