top of page
Search

When will the next RBA cash rate call be made?

  • Writer: Growthfront Home Loans
    Growthfront Home Loans
  • Feb 8, 2024
  • 3 min read



Happy days! The Reserve Bank kept rates steady in February. But a shake-up in the number of times our central bank meets each year is raising questions about how long the rate pause will last. Here’s what we could expect.


It seems fitting that in a month known for Valentine’s Day, the Reserve Bank of Australia (RBA) has shown borrowers some love by keeping the cash rate steady at 4.35%.


In reality though, the latest rate pause has nothing to do with romance or affection.


It’s more to do with keeping a lid on rising living costs.


After months of steadily rising prices, inflation looks to be heading south – currently sitting at 4.1%, down from 7.8% in December 2022.


That’s exactly what the RBA has been aiming for with their interest rate hikes.

Long story short, home owners can breathe easy – for now at least.


But when will the next cash rate decision be made?


RBA rate calls won’t be as frequent in 2024

Aussies are used to RBA rate decisions being made on a monthly basis, with a break for the holiday season each January.


That’s changing this year.


Instead of 11 meetings, the RBA will meet just eight times to decide interest rate movements, handing down their decision on the second day of:


– February 5-6

– March 18-19

– May 6-7

– June 17-18

– August 5-6

– September 23-24

– November 4-5

– December 9-10


What do less frequent meetings mean for borrowers?


So, whatever rate decision is made in March, home owners need to live with it for almost two months until the RBA meets again in May.


As such, some pundits believe fewer meetings will naturally lead to fewer rate movements. Farewell to back-to-back rate hikes every month, for example.


However, experts also warn it might lead to bigger increases or decreases as the RBA has fewer opportunities to move the needle.


And that’s not to say individual lenders can’t, or won’t, change their home loan rates whenever they like, regardless of RBA rate decisions.


For example, Mozo reports that a number of lenders lifted their variable rates in December 2023 despite the RBA keeping the cash rate steady.


Buy now or wait for rates to fall?


While the February rate pause will be welcomed by borrowers, the RBA has cautioned that further rate hikes “cannot be ruled out”, especially if inflation starts to climb again.


Even so, plenty of lenders including NAB, the Commonwealth Bank and Westpac, expect to see interest rates fall this year.


There are no guarantees – a lot can happen over the next 12 months. But it does raise questions about whether now is a good time to buy a home, or if it makes sense to hold off until rates head lower.


On one hand, a drop in interest rates could boost your borrowing power.


The catch is that lower rates could stimulate home buying activity, potentially driving home prices higher.


If this happens CoreLogic warns we could see new measures introduced to contain housing credit risk such as changes to lenders’ loan-to-value ratios.


So when might be the right time to buy?


We believe the ideal time to buy a home is when you feel ready to do so.


And a good way to find out if you’re ready is to speak to us about your borrowing power.


We can help you crunch the numbers to let you know how much you could borrow, which in turn helps you figure out what kind of property you could afford to buy.


If that sounds like a good plan to you, give us a call today.


Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

 
 
 

Comments


GROWTHFRONT Home Loans Pty Ltd is an authorised representative of QED Credit Services

Resources

Phone:  1300 388 574

Email: info@growthfront.com.au

white-logo.png
Navigation
Legal
Contact Us
Locations

Adelaide

Level 2

422 King William Street

SA 5000

SYDNEY

Level 20

201 Sussex Street

NSW 2000

Disclaimer:

GROWTHFRONT Home Loans Pty Ltd ABN 99 652 321 992  is an Authorized Representative (No. 544243) of QED Credit Services (Credit Licensee No. 387856). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs except in circumstances where you have provided your personal financial details via our online application process and received a Credit Advice from us. Before making any decision we recommend that you consider whether it is appropriate for your situation and seek appropriate taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.

Copyright 2023.Growthfront Pty Ltd. All rights reserved.

bottom of page