Reserve Bank Interest Rate Announcement

The Reserve Bank has cut interest rates by 0.25 per cent.

The reduction is good news for people paying off a mortgage.

The official interest rate is now 4.25 per cent.

Many lenders don't automatically readjust repayments when rates are cut, meaning borrowers often have continue paying at the same rate and watch their loan shrink faster.

Lower interest rates is also good news for retail as consumers will be more comfortable spending in a market where interest rates are going down.

Reserve Bank Interest Rate Announcement

The Reserve Bank has cut interest rates by 0.25 per cent.

The 25 basis point fall is the first movement in rates since Melbourne Cup Day 2010 and has been widely tipped since lower-than-expected inflation figures were released last week.

The 25 basis point reduction is good news for people paying off a mortgage.

"This fall in rates will be greatly appreciated by households as it will put an extra $60 into their pockets each month," says Domain property expert Carolyn Boyd.

The official interest rate is now 4.5 per cent. Until today, mortgage holders on variable interest rates were being charged a standard variable rate of about 7.83 per cent by their lenders.

Each 0.25 per cent drop in interest rates slices about $60 off the monthly interest cost of an average Australian mortgage.

Boyd says it's a good idea for mortgage holders to keep paying their loans at the same rate they have been for the last year, and not take advantage of the opportunity to decrease their repayments.

"You'll still get any rate cut your lender passes on, of course, but if you keep your repayments at the same level, you will pay your loan off sooner and build a buffer for any unexpected rough spots."

Today's rate cut will provide a welcome boost to the property market, which has slowed in the last year and remains subdued in most parts of Australia. It could also improve the confidence of potential first home buyers.

Further details on what the decision to decrease interest rates to 4.5 per cent means to you and the Australian property market will be outlined in this week's Domain Property Newsletter. If you are not already subscribed to our FREE weekly newsletter, click here to subscribe.

Article provided by domain.com.au

At the moment it appears that the issues in Europe & our 2 speed economy has caused enough concern for the RBA to reduce the interest rate. The lowering of the interest rate may also help business to invest in capital as well as make Australia more competitive in the export markets. Lower comparative interest rates will help bring down the dollar, making imports more expensive & exports cheaper for international markets.

RBA Interest Announcement

The RBA has again held the interest rate steady at 4.75%. Uncertainty in Europe & higher levels of savings & lower retail spending in Australia  is now putting pressure on the RBA to lower the rate. This is in stark contrast to the situation a few months ago when it was expected that interest rates would go up again before Christmas.

Reserve Bank Interest Rate Announcement

The Reserve Bank decided to keep rates on hold at 4.75 per cent . Commentators expectations were mixed, with both rate rises & falls expected. A softening housing market, negative retail spending trends & high savings levels all put downward pressure on the rates while overseas factors is pushing interest rates up. The RBA has taken a wait & see attitude until clear trends appear.

Reserve Bank Interest Rate Announcement

The Reserve Bank has opted to keep rates on hold at 4.75 per cent.

The move comes on the back of recent figures showing Australia's economy shrank in the first three months of this year, due to the catastrophic Queensland floods.

Economists are still tipping a rate rise this year, but not until August, or possibly later.

Extracted from Domain Announcements (Fairfax Media Publications Pty Ltd ABN 33 003 357 720)