Invest
Borrowers alerted: The home loan market is set to change
In light of today’s cash rate call, Australian borrowers are being told “it’s no longer reasonable” to assume factors which have previously driven interest rates will continue to do so.

Borrowers alerted: The home loan market is set to change
In light of today’s cash rate call, Australian borrowers are being told “it’s no longer reasonable” to assume factors which have previously driven interest rates will continue to do so.

The Reserve Bank announced today that the official cash rate will remain on hold for the month of March, making it the 30th consecutive month the cash rate has been unchanged.
Economists are now predicting that a cash rate cut will be the central bank’s next move.
As such, aggregators like Mortgage Choice are telling borrowers they shouldn’t use the official cash rate as an absolute indicator of what their home loan interest rates will be.
“Where borrowers are concerned, it is no longer reasonable to assume that changes in the cash rate, or lack thereof, will drive home loan interest rates,” said Susan Mitchell, chief executive officer at Mortgage Choice.
“At a Standing Committee on Economics in February, RBA governor Lowe highlighted the importance of borrowers seeking a better deal on their home loan, drawing attention to the discounts on headline interest rates that lenders are willing to give borrowers,” she said.
“Interest rates are constantly changing and the rates you see advertised can be significantly higher than the rate you could secure.”
Why the RBA kept rates on hold
For Mortgage Choice, a variety of factors contributed to today’s cash rate call.
“In the United States, the Federal Reserve made the decision to hold the Federal Funds Rate at 2.25–2.50 per cent at its last monetary policy meeting. Factors such as a slowdown of the US economy and global political uncertainty may be encouraging a cautious approach from the Fed,” Ms Mitchell said.
“While at home, RBA board members are paying close attention to the nation’s housing market activity and have lowered their outlook for dwelling investment. In the minutes of the RBA board’s previous monetary policy meeting, members noted the fall in demand for home loans, particularly among property investors.”
In addition, factors such as Australia’s lacklustre inflation rate would’ve played a part in the RBA’s decision. Recent data indicates the headline inflation rate is 1.8 per cent.

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