What does the raft of changes in finance markets mean for borrowers?

YESTERDAY THE RBA REDUCED THE CASH RATE FOR THE 2ND MONTH IN A ROW, MAKING THE NEW RATE 1%, THE LOWEST WE’VE SEEN IN RECORDED HISTORY.

SINCE THE ANNOUNCEMENT YESTERDAY, MANY LENDERS HAVE BEEN QUICK TO PASS ON THE FULL RATE REDUCTION, AND IT’S EXPECTED THAT THE MAJORITY OF LENDERS WILL BE CLOSE TO PASSING ON THE FULL RATE REDUCTION WITHIN THE NEXT FEW WEEKS.

These two rate cuts should have an immediate effect on homeowner’s cash flow. REIA reported that the percentage of income required to meet loan repayments will now drop to 28.6%, the lowest since 2003 and coming off a peak in 2008 of 51%.

But it’s not just a reduction in interest rates that is getting property owners and potential buyers excited, there are also significant policy changes, which will be rolled out over the next few weeks that will dramatically change people’s borrowing capacities.

With so much going on, I thought I’d bring you up-to-speed with the below ‘Finance Market Update’ video, which will take a step back to what we’ve recently been through and also take a look at what I think is going to happen over the next 6 months to 1 year.

Would love to hear your thoughts on the video and if you have a question or scenario you’d like to run by me, please get in contact. Otherwise head to our Videos page for more educational videos.

Kind regards,

Tim Russell