Interest Rate Rule of Thumb

W

WebBoard

Guest
From: Ctrader .


This is an excerpt from a 'Lot109' newsletter.

As a 'rule of thumb' the novice can measure interest rates with the inflation rate. For the past thirty years Australian home loan mortgage interest rates in the standard principal and interest variable format have been easily measured as being double the current inflation rate e.g. if inflation is currently running at 3% expect the mortgage rate to borrowers to be 6%. If the inflation rate rises to 5% then expect the mortgage rate to borrowers to be 10%.

I can only see a relevance if the inflation rate has a high corelation as stated and is a leading indicator. Does anyone know of any graphs plotting both the inflation and interest rates to verify this.
 
Last edited by a moderator:
Reply: 1
From: Glenn Mott


CTrader,

I was trawling through the Reserve Bank's website a couple of days ago and found data describing the cash rate and average bank variable rates going back to 1959.

try http://www.rba.gov.au

Glenn
 
Last edited by a moderator:
Reply: 1.1
From: John Fewster


Thanks Glenn for the above site info.
Plenty of interesting statistics there. Looks like the above "rule of thumb" is not true! Got any other good sites you would like to share?
 
Last edited by a moderator:
Reply: 1.1.1
From: John Fewster


Warning about above attachments:- 89/90 interest rate figures may be painfull to sensitive viewers!
 
Last edited by a moderator:
Reply: 1.1.1.1
From: Tibor Bode


Hi John,

I am trying to load it down, but having problem with our corporate WIndows NT tempfile (out of my control).
Would you mind emailing these attachments to keygate@presto.net.au

I'd greatly appreciate it.

Thanks,


Tibor
 
Last edited by a moderator:
Top