RBA Cash Rate Announcement - 19/03/2024

The official cash rate remains unchanged at 4.35%. But that did not stop one bank from increasing its variable rate products by 5 and 10 basis points.

Unemployment rate has risen to 4.10% up from 3.92%. Highest since January 2022. Wage growth is at 4.2%. Highest since September 2008.

I think in the coming weeks we will see more and more banks lowering their 2- and 3-year fixed rates to attract new to bank customers and to keep existing customers from shopping around too hard. 

Currently, BOQ offers one of the lowest fixed rates in the market. 5.79% for its 2- and 3-year fixed terms for owner occupied P&I up to 90% LVR. 

They are also offering a one-off $2k cashback rebate for all external new to bank refinances with a loan to value ratio of 80% or less.

There won't be signs of the RBA reducing interest rates until inflation target is back within range of between 2% and 3%.

The good news is Inflation rate has been steady at 3.40% for two consecutive months. 

The most significant price rises were Housing (+4.6%), Food and non-alcoholic beverages (+4.4%), Alcohol and tobacco (+6.7%) and Insurance and financial services (+8.2%).

Something that I find fascinating is that our mortgage rates are significantly higher than our peers, primarily Canada, and the UK, but not NZ and the US. 

Canada’s official cash rate is currently at 5% and the UK is 5.25%, although mortgages rates for these two countries are 1% lower give or take. Something that I’m keen to understand better in the coming weeks.

As always, feel free to reach out to one of our team members at CCS Lending if you have any other questions.