There could be some relief for households with a mortgage with economists predicting an interest rate cut next week. But if the Reserve Bank does cut how much will flow through to borrowers and how quickly?
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00:00Raj Menon checks in with his mortgage broker every six months to make sure he's getting
00:10the best home loan deal.
00:12Any little rate cut would actually make a tremendous difference in our household.
00:15The official cash rate has sat at 4.35 per cent for more than a year, but that's expected
00:21to fall soon.
00:22Since the start of the year we've seen a huge uptake of clients, whether or not they're
00:25new or existing, come to us to try and understand what their borrowing capacity looks like.
00:31Economists from all four big banks are expecting a quarter of a percentage point rate cut from
00:36the RBA when it meets next week.
00:38And in this cycle ANZ is predicting two cuts, while CBA and Westpac think there'll be four
00:44and NAB is forecasting five.
00:46I think they'll basically just maybe do 25 per quarter and we have rate cuts down to
00:54If there is a rate cut in the next meeting, homeowners with a $750,000 mortgage could
01:02see their repayments fall by $115 a month.
01:06While the banks can't say what they'll do about passing any cuts on, here's a hint.
01:11We've given that close consideration, we understand how much our customers and the broader community
01:17are looking forward to rate relief.
01:19Even if the banks pass on the rate cut, it's a good idea to contact your lender, since
01:24some won't automatically adjust your minimum monthly repayments unless you request it.
01:29Meanwhile lenders are already cutting fixed rates to lock customers in.
01:34I do expect this competition will ramp up when we see another cash rate cut.
01:39Providing much relief for homeowners like Raj.