Simon Bednar (pictured), Finsure’s CEO, has said that it was not a surprising move for the RBA to keep the cash rate on hold, following the increase by 25 basis points to 4.35% on Melbourne Cup Day.
“I expected the RBA to hold interest rates steady in December, given they would want to see the impact of their November increase leading into Christmas,” Bednar said.
“Since the November meeting on Melbourne Cup Day, there has been a slight increase in unemployment, lower than expected inflation and a slowing of retail and house price growth.”
Bednar asserted that in consideration of the current trends, the RBA will wait regarding further decisions about the cash rate. However, the Finsure CEO said that the reserve bank may not hesitate to raise the rates again in February if the current trend reversed.
“Mortgage holders need to be prepared to see rates rise again next year,” Bednar said.
Bednar noted that brokers have played a part in helping customers as mortgage holders continued to experience stress due to the cash rate hikes.
“Brokers boast a market share of almost 70% of all new residential loans, and they are increasingly relied on by their clients who are navigating a cost-of-living crisis, and 13 cash rate increases in 18 months,” he said.
Since the time when the official rates held at 0.1% as the RBA’s first attempts to mitigate the high inflation began in May 2022, the cash rate had seen a total of 13 increases.
