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Home loan interest rates tipped to rise in 2016

 

BUCKLE your seatbelts because experts are expecting rates to start rising by the end of next year.

 

While analysts canvassed by PerthNow believe the Reserve Bank of Australia will leave mortgage rates on hold at their monthly meeting on Tuesday, several are predicting the arrow to turn up sometime in 2016.

 

Some experts also believe the worsening financial troubles in Greece and other parts of the world could cause the official cash rate to fall again once this year.

 

Finder.com.au surveyed 33 financial sector experts and economists and found they were unanimous that rates would stay on hold at their historical low of 2 per cent next week.

 

Analysts at RateCity and Mortgage Choice also predicted rates to remain on hold.

 

However, the majority of experts in the Finder survey agree the cash rate will start to rise in 2016 after one further drop this year.

 

“The latest global economic uncertainty has thrown a spanner in the works for our local economy, as the Reserve Bank could now look to minimise the impact by reducing the cash rate this year,” said Finder spokeswoman Michelle Hutchison.

 

RateCity financial analyst Peter Arnold said: “While I think the chance of a rate cut in July is slim, I’d bet on another rate cut before the end of the year in around November.”

 

Ms Hutchison concluded: “Even if interest rates fall further this year, it’s likely that they won’t stay lower for long, as our survey found that rate hikes are around the corner.”

 

 
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