What’s Happening With Interest Rates? – September Rate Report

Spring has sprung, and we’ve been granted the first cash rate decision of the new season. However, if you were hoping that September would inspire a change in interest rates, the Reserve Bank of Australia has decided to keep the cash rate on hold at 4.35%

The lack of any cash rate movement this year may have been a relief at one point, but with high inflation and troubles with the cost of living, a lack of reprieve from high interest rates is compounding into more anxiety for homeowners.

This follows a dramatic couple of weeks within the RBA. Michelle Bullock recently warned that, with no cut in sight, homeowners may have no choice other than selling their home, as repayments continue to stretch family household budgets.

What Does This Cash Rate Decision Mean For Me? 

This marks the 6th Cash Rate hold decision by the RBA since it was raised to 4.35%. Since November, the Consumer Price Index which measures household inflation, has risen 1% [1](ABS, 2024)

Increases in interest rates, alongside high inflation, are straining the cost of living for many homeowners, and there doesn’t seem to be any relief in sight from government agencies, with Michelle Bullock stating owner occupiers may need to sell their homes. This is owed to the average household income not always covering “essential spending and scheduled mortgage repayments”[2] (Bullock, 2024). If you’re hoping for change in September, interest rates are likely to stay static.

There’s no certain date for a cash rate cut. The RBA has held strong that we won’t see a cut any time soon, but some experts predict they’ll be forced to make cuts before the end of the year.[3]

What Does This Cash Rate Decision Mean For Homeowners? 

A higher cash rate means higher interest rates. If you borrow now you’ll pay more on your mortgage repayments.
This can also affect borrowing capacity, as the probability of you meeting repayments is slightly lower, so entering the market may prove a little more difficult. Chat with our friendly team today to discuss your options.

How Can I Prepare For a Cash rate Cut or Hike?

It’s difficult to predict what the next RBA decision will be. The Australian economy has spent the last year in a state of limbo. The cash rate was first hiked over three years ago, with cuts not guaranteed for the near future.

While we can’t predict the future, we can assure you we’re is here to help you during challenging times. Through repricing, refinancing, and debt consolidation, we may be able to help lighten the load.  Reach out today to find out what’s possible!

If you’re not sure how to get in touch, call 1300 886 100, or fill out the enquiry form.

[1] Australian Bureau of Statistics (Jun-quarter-2024), Consumer Price Index, Australia, ABS Website, accessed 19 September 2024.

[2] Bullock, Michelle, The Costs of High Inflation Reserve Bank of Australia, 5th September 2024, accessed 19th September 2024

[3] Verrnender, Ian. Why the Reserve Bank will be forced to cut rates before year’s end. ABC News, 10^th Sept 2024, accessed 19th September 2024

• SHARE