Interest rates on the rise

Yesterday's decision to take the official cash rate from 3.75 per cent to 4.0 per cent was not a big surprise, but how the Reserve Bank proceeds from here will be very interesting.

Most borrowers would be happy to see interest rates left on hold for the next few months, but what the RBA will be asking is, how confident is the Australian community, the Australian public, and Australian business about the future?

Many economists predict the OCR will hit 5 per cent by the end of this year, so mortgage holders should be mindful of these upcoming rises and budget accordingly. If you are concerned about pending rate rises or would simply like to ensure your current home loan is the best it can be contact your local mortgage broker to arrange a confidential, professional analysis of your current loan options from our large panel of banks and secure lenders.

Additionally, if you are considering borrowing money to purchase or renovate property, or to refinance your current loan, ask about getting a free property report for the suburb you are interested in. You could save time and money simply by knowing the worth of the property and better understanding the trends occurring in the local area.

Source: The Insider, Peter Sullivan, Home Finance Broker. Contact on peter.sullivan@loanmarket.com.au

Exciting news to share

My beautiful daughter Natalie announced her engagement to Daniel Berndt who proposed on Valentine's Day. There is much excitement in our household and we can’t wait for her to return from the Cayman Islands to celebrate.

Strong employment figures set the scene for higher interest rates

The surprising fall in unemployment figures (national unemployment down from 5.5% to 5.3% in January) has caught almost everybody off guard. The consensus amongst economists prior to the announcement was that Australia’s unemployment rate would rise to 5.6%.

The rate of unemployment has fallen now for three straight months on a seasonally adjusted basis after bouncing between 5.7% and 5.8% between May and October last year. The trend certainly suggests that unemployment has peaked significantly lower than the 6.75% forecast by the Federal Treasury June this year.

On a state by state basis the rate of unemployment shows some variance. Of the Australian States, South Australia is recording the lowest rate of unemployment at just 4.4% while the highest jobless rate is in New South Wales with 5.6% unemployed.

While the news is great that more people have a job, the flipside remains that the Reserve Bank is likely to respond with further interest rate rises. Low unemployment leads to wage pressures, improved confidence and greater consumption – all of which will fuel inflation and give the RBA cause to continue lifting interest rates.

Source: http://blog.rpdata.com/