At the April Reserve Bank of Australia meeting, the Board have kept the cash rate unchanged at 2.5% (http://www.rba.gov.au/media-releases/2014/mr-14-05.html). There’s no news there, as the RBA have been quite clearly stating we will have a period of stability in interest rates.

Their announcement states that inflation is expected to be consistent with target levels of 2% to 3% over the next two years. While parts of the economy require stimulus, the concern would be that dropping rates could overheat the already hot housing market. On the other hand, increasing rates could push the Australian dollar higher, which the RBA definitely don’t want.

At Golden Eggs Home Loans, we will continue to keep you informed regarding the interest rate environment and as always, if you wish to discuss what this means for you and your home loan, please contact us today.

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