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As an income earner it is a must for you to know the prevailing interest
rate. One way or another, there will come a time that you will have to borrow
money for unplanned expenses. Knowing the different interest rate will guide
you in choosing the best loan to avail of to sustain your needs. You can easily
determine if you have the capacity to pay the loan without the risk of default.
The online loan calculator helps to plan repayments of the loan.
The proliferation of many different financial companies in Australia
offering all sorts of loans triggers stiff competition which in turn benefits
the loan applicants as they are offered affordable payment schemes with low
interest rates. This favors the borrowers as they have more options to choose
from and end up with the best and easy payment plan.
In Australia, the Reserve Bank of Australia or the Australian Central
Bank issued new circulars which lowered the previous interest rate. The
lowering of interest rate allows home borrowers to enjoy a repayment relief
until early next year. On this note, there are ten different things that you
should know regarding the current interest rate, including:
- The
Reserve Bank of Australia decided to lower the interest rate to 2.5
percent per year. The reason for this is for maintaining the stability of
prices, securing full employment, and to provide economic prosperity to
the Australian people.
- It
is the lowest interest rate the Reserve Bank of Australia has implemented
so far.
- The
ultra low interest rate makes the affordability level at the highest level
in many years. It enables workers to avail of the very low interest rate
in purchasing their own homes.
- There
is no change in the interest rate since August 2013 when the rates were
cut down by 0.25 percent.
- Before
the lowering of interest rates, the prevailing lowest interest is at 3
percent in April of 2009 which lasted in October of that same year.
- The
interest rate was raised to 4.5 percent in August 2011 and was lowered to
3.5 percent in August 2012.
- For
a total of 25 meetings since August 8 of 2007, there have been numerous
changes that occur which affected the interest rate. Eleven of these
meetings saw an increase of 25 basis points, while nine meetings saw a
decrease of 25 basis points, three meetings have decreases of 100 basis
points, one saw a decrease of 75 basis points while another one had a 50
basis point decrease.
- In
the minutes of the last meeting presided by the RBA governor last July, he
pointed out that the most logical course of action is to stabilized the
interest rates.
- International
economists are predicting that a property bust may occur because of the
low interest rate coupled by high property prices.
- A
survey of AAP showed that nine out of fifteen respected economists said
that an increase in interest rate might happen in the first half of 2015.
This will be the first increase after more than four years.
Understanding of the prevailing interest will help us decide whether
it’s wise to borrow or not.
Photo credit to: Fast
Access Finance
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