New record lows ahead: Your mortgage rate could be slashed further

Thu, 07 Nov 2019  |  

This article was written on 20 August 2019: It was on the Yahoo Finance website at this link: 


New record lows ahead: Your mortgage rate could be slashed further

Fancy a mortgage rate of 3 per cent? Maybe a little less?

Within the next few months, mortgage interest rates are on track to fall to fresh record lows, probably below 3 per cent.

That is the overwhelming message to come from the Reserve Bank as it struggles to deal with the soft economy where inflation is tracking at record lows, a long way from returning to the 2 to 3 per cent target range.
While the totality of these interest rate cuts are unlikely to be fully passed on to mortgage holders, strong competition within the mortgage market will see mortgage rates fall from current levels around 3.5 per cent down below 3 per cent. This is a stunningly low borrowing cost for those buying a house.

It also means that housing affordability in much of Australia will be at its best level in many decades.

How much could you save on your mortgage?

Over the past two years, house prices have dropped 10 per cent, a time when mortgage rates have fallen markedly and household incomes have risen by over 6 per cent, even though wages growth has been weak.

A 3 per cent mortgage interest rate will mean that monthly repayments on a $400,000 mortgage, repaid over 30 years will be under $1,700. This is down from almost $2,300 a month when interest rates were 5.5 per cent. Looked at another way, for that $2,300 monthly repayment on a $400,000 loan when rates were 5.5 per cent, the same monthly repayment is required for a mortgage just under $550,000 when interest rates are 3 per cent. That is an extra $150,000 of borrowing capacity.

Either through a higher borrowing capacity or a lower monthly repayment, housing affordability is extremely favourable.

It’s time to negotiate on your mortgage rate

It is a good time to negotiate a lower interest rate given strong competitive pressures because no one should be paying more than 4 per cent even before the next few interest rate cuts are delivered. It should be reasonably clear what this means for house prices. Already house prices are starting to edge up as the impact of lower interest rates and favourable affordability attracts new buyers.

Easier credit conditions are also feeding into stronger housing demand. If interest rates do fall as the market is pricing and there is further strong ongoing demand from first home buyers and strong population growth, house prices are set to register solid gains for the next year or two. It would be reasonable to expect nation-wide house prices to rise 5 to 10 per cent between now and the end of 2020, with the strongest gains likely in Perth, Sydney and Melbourne.

Rising house prices will help to support household wealth levels, an issue that has a strong influence on consumer spending.

All of which points to a better year for the economy into 2020 driven, in large part, by the RBA coming to its senses and delivering aggressive interest rate cuts in a simple yet effective measure to boost economic growth.

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Wed, 29 Jul 2020



Covid19 has opened a door for Australians to positively accept significant changes that will lead to a shared good. This rare opportunity enables us to achieve sustainable economic and social goals that create a new ‘normal’ as our way of life.

These Ten Steps are presented as non-partisan recommendations to the Australian Parliament in the firm belief that, if they embrace them, the Australian economy and society will be greatly enhanced after the Covid19 pandemic has passed.

*A job for you if you want one.
A significant increase in part time and casual employment can be created that will enable you to enjoy a more creative and peaceful lifestyle and to live longer and better. The traditional age at which you would have been expected to retire will become obsolete as a result. An access age for pension and superannuation will become your choice. This will enable you to remain in paid work for as long as you want to, on a basis that you choose, while boosting the productivity and growth of Australia.

*You will get wage increases that will be greater than your cost of living.
A demand for enhanced innovative skills at all levels of employment will be created as the economy grows in strength, thereby enhancing your stature in the workforce and enabling executive salaries and bonuses to drop to levels that are accepted as justifiable by employees, shareholders and customers.

The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

Tue, 07 Jan 2020

This article first appeared on the Yahoo Finance web site at this link:   


The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

For many people, the cost of the fires is immeasurable. 

Or irrelevant. 

They have lost loved ones, precious possessions, businesses and dreams and for these people, what lies ahead is bleak.

Life has changed forever.

As the fires continue to ravage through huge tracts of land, destroying yet more houses, more property, incinerating livestock herds, hundreds of millions of wildlife, birds and burning millions of hectares of forests, it is important to think about the plans for what lies ahead.

The rebuilding task will be huge.

Several thousands of houses, commercial buildings and infrastructure will require billions of dollars and thousands of workers to rebuild. Then there are the furniture and fittings for these buildings – carpets, fridges, washing machines, clothes, lounges, dining tables, TVs and the like will be purchased to restock.

Then there are the thousands of cars and other machinery and equipment that will need to be replaced.