In its last Board meeting for the year, the Reserve Bank of Australia (RBA) played nice and left the cash rate on hold at the historically low setting of 1.5%.
This not only marks the 16th consecutive month that rates have been left on hold, but it means the RBA made no changes to the cash rate throughout 2017. So, what does stability in the cash rate mean for you and what should you expect from 2018?
Two great questions.
First, the fact that the Reserve Bank has left the cash rate on hold for this long should be perceived as ‘good news’. The low cash rate has helped keep the cost of borrowing at very affordable levels.
Most economists are predicting at least one rate hike in 2018. When that may happen is truly up to the powers that be over at the RBA. But while we don’t know when the cash rate may rise, we do expect mortgage rates on the whole to stay lower for longer.