RBA Lowers cash rate 25 BP

Surprising. I was betting that if another cut came, it'd be in Q3 or Q4 of this year earliest.

Given the state of things, I can't imagine more than another .25% drop (unlikely) before an eventul creep up again within 12-18 months. What's everyone else reckon?

Great timing as I'm very keen to grab IP#1 and lock in for a few years while they going's good.

But bad news for my ridiculous 15 years fixed PPOR loan (yeah, I know, worst decision ever, hence repeating it often to remind myself) which I'm wanting to break as soon as is feasible. Break fee is going to blow out beyond $40k (balance under $250k). Might be quite a wait on that one..
 
Yep, three in now...

SMH said:
NAB was the first of the big four banks to lower its standard variable home loans. It cut the rate by 25 basis points to 6.13 per cent per annum.

Commonwealth Bank also passed on the full rate cut this afternoon, lowering its standard variable home loan rate to 6.15 per cent with effect from May 13.

Westpac lowered its rates just before 5pm, bringing its standard variable mortgage rate down by 25 basis points to 6.26 per cent, with effect from May 20.

My WBC banker called me just before the announcement to let me know what they were doing. All of my remaining loans are variable now so that will help. 25bp on $2M is $5K pa.

Cheers,
Michael
 
Just got a $15K pay rise. Noice. :cool:

Noice indeed! :D

Once I refinance my Commercial Construction loan from 7% down to 5.26% at WBC with my 100bp discount off their standard variable that will be about another $20K pay rise pa. Very noice!! :)

Strata documents signed and on their way back from the bank as we speak. New refinance loan apps underway.

Also removing all the crossing up as I go so each strata unit secures its own mortgage only. Might even look to lock one or two away for a while. I hear you can get 5.4% for 5 years at present, sounds tempting.

Happy days all round (unless you're a retiree...)

Cheers,
Michael
 
lol...I guess that's why I'm not on seven figures working for one of the big banks....doh :D

Didnt know banks employed doctors? :)

But good news on the 0.25%... any thoughts on how this will affect fixed given the past few weeks the fixed rates for 2+ have been going up not down.

I am fixed at 4.99% currently.
 
2.00% cash rate and property and building will both go nuts.

If this were to happen wouldn't tenants be vacating in droves and buying their own homes (those with jobs anyway)? More people would be purchasing an IP that they once considered unaffordable, therefore more supply of rental properties. Rents would have to drop?
 
If this were to happen wouldn't tenants be vacating in droves and buying their own homes (those with jobs anyway)? More people would be purchasing an IP that they once considered unaffordable, therefore more supply of rental properties. Rents would have to drop?

I think you'll find that the large majority of renters who wish to enter the property market have not already due to a lack of sufficient deposit, not waiting on the sidelines for a more affordable property market.

Prices in Adelaide have dropped significantly the last few years to the point that a large amount of Adelaide is cheaper to buy, than rent. In yet people still rent in droves. ;)
 
Surprising. I was betting that if another cut came, it'd be in Q3 or Q4 of this year earliest.

Given the state of things, I can't imagine more than another .25% drop (unlikely) before an eventul creep up again within 12-18 months. What's everyone else reckon?

Great timing as I'm very keen to grab IP#1 and lock in for a few years while they going's good.

But bad news for my ridiculous 15 years fixed PPOR loan (yeah, I know, worst decision ever, hence repeating it often to remind myself) which I'm wanting to break as soon as is feasible. Break fee is going to blow out beyond $40k (balance under $250k). Might be quite a wait on that one..

The effect of the super increase from 9% to 12% from July 1 is looking to be straw that breaks the camels back for many that I'm aware of. Lots of Micro and small businesses closing down, either bringing retirement forward or just unable to keep going any longer. Might be different in the metro areas but I know most towns north of Newcastle aren't looking rosy.
 
If this were to happen wouldn't tenants be vacating in droves and buying their own homes (those with jobs anyway)? More people would be purchasing an IP that they once considered unaffordable, therefore more supply of rental properties. Rents would have to drop?

Some will, but lots won't. Lots won't have a deposit, and lots of people living with parents and relatives will want to move out by themselves.

There will be plenty of demand.
 
If this were to happen wouldn't tenants be vacating in droves and buying their own homes (those with jobs anyway)? More people would be purchasing an IP that they once considered unaffordable, therefore more supply of rental properties. Rents would have to drop?

Money is already so cheap that affordability isn't an issue for first home buyers. Their challenge is putting together a deposit and a change in interest rates does very little to help that.
 
The effect of the super increase from 9% to 12% from July 1 is looking to be straw that breaks the camels back for many that I'm aware of. Lots of Micro and small businesses closing down, either bringing retirement forward or just unable to keep going any longer. Might be different in the metro areas but I know most towns north of Newcastle aren't looking rosy.

Super isnt going up 3% on july 1, it is 3% over 7 years. If the business owners you know dont understand that then yeah its probably better they cash in their chips.
 
not sure it is an overall positive implication by the RBA but I'll still take it.

in effect the federal govt just gave us two interest rise for those with loans through the increase in medicare levy.
 
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Well that was a surprise! Talk on the town was for no move at all.
It could be very interesting for the Perth market - could put it into warp speed.
I want to get into Melbourne before it picks up much more.

Why Melbourne, why not Brisbane or Sydney?

The dopes who work at the big banks were the ones predicting no rate rise. However, those smarty pants who are paid even more and earn 8 figures are those who predict it and the bond markets show it.

Care to expand?

Super isnt going up 3% on july 1, it is 3% over 7 years. If the business owners you know dont understand that then yeah its probably better they cash in their chips.

yep up to 9.25% (up from 9%).
 
The effect of the super increase from 9% to 12% from July 1 is looking to be straw that breaks the camels back for many that I'm aware of. Lots of Micro and small businesses closing down, either bringing retirement forward or just unable to keep going any longer. Might be different in the metro areas but I know most towns north of Newcastle aren't looking rosy.

Goes from 9% to 9.25% July 2013.
Then 9.5% 2014
Then 10% 2015, etc...

Still sucks as an employee as the offset was a 27% Company Tax but we got screwed. And they wonder why in AUS we don't make anything here, fix anything here and import our clothes, food, of why not say,..... almost everything!!! We sign free trade with Thailand and import toyotas, honda, etc and sell them what,????? Our future.

But of course ALP wants employers to put more in Super since they are not going to tax Employees on the way out. Hang on Peter it only for the rich earning with $2M in super earning 5% so $100k earning a year. They fail to point out if you have $500k in super and it is flat for 4 years, so nothing! then it goes up 30% in the next year, so only a per annum return of 7.5% then you earning $150k and BINGO WE TAX YOU!!!

And they also forget to add in 20 years time when i retire $100k per annum earnings will be the equivalent of earning $30k now.

Election please and stop this madness.

Rant over, Peter
 
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