What a big year 2009 was for us all. A few points worth considering are:
- The current RBA cash rate is sitting on 3.75% up from the April 29 year low of 3%. Most home loan variable rates are sitting at approximately 6.05%.
- The early to mid 1990's was the last time a 2.2% gap existed between the client variable rate and the RBA cash rate. This changed when competition was introduced in the form of non bank lenders.
- In March this year bankruptcies hit a 20 year peak, up 261% on 2008
- The major five lenders fixed rates have been shooting up all year, however, these rates appeared to have stabilised over the last two months. There is still a big gap between the fixed and variable rates.
What's next?
- The major banks are forecasting the cash rate to rise by approximately 1% over the next 12 months.
- If the banks align their variable rates to the RBA rate movements over the next 12 months, the client variable rate would be approximately 7.05%.
