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LBRY Claims • mortgages-below-3-more-debt-the-game-of

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18 Feb 2020 04:13:55 UTC
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Mortgages Below 3%? More Debt? The Game of Buying Houses Continues!
This coming Tuesday, the Reserve Bank of Australia will almost certainly cut interest rates to a record low of 1.25%. Some lenders are already cutting their mortgage rates in anticipation of the upcoming cut.

Several large banks — including NAB, ING and Bank of Queensland — have lowered their mortgage rates this week in an attempt to stay competitive ahead of the anticipated rate cut.

Greater Bank, an Australian customer-owned bank, has made the unprecedented move of cutting one of its fixed-rate home loans to less than 3%. On their website they say,

“Greater Bank will offer the lowest one-year fixed rate home loan in the market, after announcing today that it will reduce the interest rate on it's Ultimate Home Loan and Great Rate Home Loan to 2.99% p.a.”

Greater Bank CEO Scott Morgan said,

“As a customer-owned bank, we don’t have shareholders which allows us to redirect funds to directly benefit our customers. This is why we are in a position to offer the most affordable one-year fixed rate home loan in the market. This will ensure we remain very competitive against the industry’s major players in this fixed loan market. These are the lowest fixed term rates I have seen in my time in the banking sector and the perfect opportunity for new and existing customers to look at their current financial position and considering fixing their home loan.”

But be warned… Just because the RBA is set to reduce interest rates, does not mean that all lenders will pass on the full amount. Graham Cooke, insights manager at comparison website Finder said,

“If the RBA cuts by 25 basis points, this doesn't necessarily mean banks will pass on the rate cut in full. If you don't get the full rate cut, vote with your feet. A lower cash rate will spur even further competition within the market, so it is the perfect time to weigh up your options as you have the bargaining power. The best value home loan starts with a '3'.”

But be careful about rushing in too early and fixing your mortgage rate. Westpac are predicting a total of three cuts this year! They suggest that June, August, and November will be the most likely months for a cut. After three cuts, that will put the interest rate at 0.75%! That’s insane!

Westpac's chief economist, Bill Evans, based this prediction on the rather gloomy outlook for the Australian Economy. He said,

“We see the unemployment rate drifting up to 5.4% by year's end, economic growth at 2.2% for 2019, underlying inflation at 1.4%, and the housing market still weak, although approaching stability.”

Investment bank, JP Morgan, went even further and predicted that Australian interest rates will fall to around 0.5% by mid-2020. That would require a total of four rate cuts by the RBA. JP Morgan have stated their re
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