Interest Rate Cut Australia
Will interest rates fall below 3 per cent?
The Reserve Bank of Australia has cut rates four consecutive times since September, lowering the cash rate to 4.25% for the first time in six years. But many economists think the rate will go even lower.
Several leading economists are predicting the Reserve Bank's cash rate will sink as low as 2.5 per cent by September 2009. While October and December saw aggressive cuts of one per cent, the next rate cut is likely to be less dramatic, perhaps 0.25 per cent, followed by further small cuts through until mid-2009.
Commonwealth Bank chief economist Michael Blythe and Commsec chief analyst Craig James predict small rate cut when the Reserve Bank next meets in February.
Lenders have been passing on the rate cuts to home-owners, although only National Australia Bank, The Commonwealth Bank, Bendigo Bank and non-bank lender Aussie Home Loans passed on the most recent rate cut in full.
For a home owner with a $250,000 home loan, the combined cuts now save around $500 a month on repayments.
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