The Reserve Bank of Australia (RBA) has held the cash rate steady at 4.35% at its June meeting.
This decision is giving mortgage holders a moment to catch their breath after three consecutive increases earlier this year.
The decision to pause reflects a more cautious approach from the board as it waits to see how the economy responds to the rate rises already in place.
For a full breakdown, read today’s official statement on the RBA’s website.
Annual headline inflation eased from 4.6% in March to 4.2% in April. Meanwhile, the trimmed mean, which is the RBA’s preferred measure of underlying inflation, nudged up from 3.3% in March to 3.4% in April.
RBA governor Michele Bullock recently said higher interest rates were working, but struggling households could face up to two more years of cost-of-living pain.
“These increases have been necessary to tighten financial conditions and slow growth in demand in the economy to ensure we get on top of inflation,” she said.
“We have already seen some signs that this tightening has worked, but it will take one to two years for the full effects to flow through the economy.”
“Now I recognise this is a difficult time for many households facing cost-of-living pressures, but it is important we bring inflation under control.”
If your repayments are starting to feel like a stretch, it’s important to get in touch before you get into financial hardship territory. Over 1.4 million Australian mortgage holders are currently at risk of mortgage stress, but many don’t realise that switching lenders, or even just negotiating with your current one, could make a meaningful difference to your monthly bottom line.
That’s where we come in. We’ll compare the market on your behalf and find a home loan that works for your financial situation and goals.
The next cash rate decision lands on 11 August. Opinions are divided on what comes next, with some leading economists now predicting a prolonged pause on interest rates. We’ll keep you updated in the coming months.
Need help understanding what this announcement means for you? Contact us today.
