In last month’s blog I wrote about how banks have an assessment rate or ‘buffer’ rate which they use to assess your capacity to borrow money. If you need a reminder, use following link:
> Will There be an Interest Rate Cut?
Now that the federal election has been ‘run and won’ , it looks like we are going to see some changes in monetary policy. The most obvious and visible one is that the Reserve Bank of Australia has dropped the official cash rate, so the interest rate on variable mortgages should decrease. That’s good if you’ve already got a variable mortgage.
It also looks like the assessment/buffer rate will be reduced which probably won’t be reported by the media but is potentially even better news. This will allow you to get a new mortgage more easily or refinance your existing mortgage to a much lower rate.
As soon as this is made official, I’ll be sure to let you know. So, if you have been looking to get a cheaper mortgage it looks like it’s going to be easier in the next few months, than it has been for the last few years.
Michael