INTEREST rates have lingered at historically-low levels and experts believe homeowners have plenty of time yet to enjoy them.
The cash rate fell three times in the 2012/13 financial year by 75 basis points to 2.75 per cent and it resulted in significant reductions to both standard variable and fixed rates.
Comparison site RateCity’s data showed the average standard variable rate dropped by 69 basis points from 6.4 per cent to 5.71 per cent over the past 12 months.
Two-year fixed loans fell even further by 83 basis points from 5.98 per cent to 5.15 per cent.
While borrowers continued the obsession with paying down debt managing director of 1300HomeLoan John Kolenda said they could expect many more months of low rates.
“With all the talk of the mining activities starting to reduce and the retail sector still in turmoil I think we are more likely to see a couple of rate reductions,” he said.
“I don’t see the likelihood of any rate rises on the horizon.”
RateCity spokeswoman Michelle Hutchison said 2012/13 has been a great year for borrowers but there inevitably will come a time when low-interest environment spins around.
“Many borrowers on variable home loans are keeping their repayments higher so a lot of people out there are using their extra cash to pay off their home loan sooner,” she said.”
“The RBA cash rate is historically low so it’s likely that interest rates will eventually return to normal levels so it’s even now more important to make sure you’re stockpiling as much money as you can on to your mortgage while rates are low.”
CUA’s general manager of products and marketing Jason Murray said interest rates were unlikely to fall much further.
“The Australian economy does appear to be slowing and if the Australian dollar comes down with that slowing, some experts are predicting it could create more productivity and you will start selling more and other industries will kick on,” he said.
“As a consequence you’ll be less likely to have declines to interest rates.
“But I don’t see too many more rate cuts though, it’s more likely to be a flat position than to see significant rate cuts.”