While the cash rate continues to sit at a record low of 2.5 per cent, not all Australian consumers have benefited from 12 months of reduced rates. The historic low and prolonged cash rate has seen mortgage payers enjoy substantial reductions in minimum loan repayments.
On the average home loan of $300,000, mortgage payers have experienced an estimated $6,000 extra in the yearly household budget.Many have chosen to forgo the reduction and get ahead by taking advantage of the opportunity to pay extra capital off the loan putting them in a strong position to face the future.
The ease to borrowing constraints have also stimulated consumer spending by creating a certain perception of wealth amidst homeowners, the Reserve Bank believe.
This perception is further supported by rising house prices and a steady turnover in the property market.
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