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Well, predictions are in and it seems likely that the RBA will hold rates again when they announce their decision on 19 March.
While indications from experts have suggested a holding pattern until later in the year, the RBA refused to rule out further rate increases with February’s rate announcement, leading to a fair amount of uncertainty and trepidation, particularly amongst home owners fighting to remain afloat as mortgage rates peaked.
The RBA board noted then that, even with the December quarter of 2023 falling to 4.1%, ‘it would take some time before they could have sufficient confidence that inflation would return to target within a reasonable timeframe.’
With rates on hold so far this year, and inflation slowing, most commentators seem pretty confident that rates will stay put.
All four major banks have predicted rates will hold at 4.35%. They see the holding pattern to continue until late 2024, although there is debate about when rates might begin to go down.
| Bank | Predicted Cash Rate |
| ANZ | 4.35% |
| CBA | 4.35% |
| NAB | 4.35% |
| Westpac | 4.35% |
With rates at 4.35% since the last increase in November 2023, home owners are holding their breath for any indicators that rates might begin to fall sooner than the end of year prediction.
While there are positive signs as Australia’s economy swings further into 2024, so far, the major banks do not see any indication that the RBA will enter an easing cycle of rate cuts before September 2024, with some holding out for November.
Keep holding on
So it seems that rate cuts are now firmly on the horizon, but still in the distant future.
And, with the cost of living challenge showing no sign of shifting, many homeowners will be wondering if they can hold on long enough to feel the relief of rate changes at the end of this year.
If this is you, what can you do to keep on keeping on?
Budgeting
Many people are already counting coins to get by but a real budget is more than this.
Budgeting requires you to take a good hard look at your current finances, your needs and responsibilities, to then identify strategies that will get you where you need to be financially.
While it can feel hard to get started, once it’s done, you can rest assured the decisions you’re making each day will fit your financial goals.
You might choose to talk to a financial advisor, but you can also make a big impact on your finances by getting started yourself. If this sounds like something that might support you, check out https://yhomeloans.com.au/why-save-more-is-a-terrible-new-years-resolution/ for some tips.
Refinancing
Refinancing is something we’ve all heard before, but if you haven’t looked into it yet, now might be the time to get started. Even if you have refinanced before, it might be time to check your options again.
Refinancing involves changing the terms of your existing loan based on a re-evaluation of your current value and circumstances. It may shorten your loan term and reduce your repayments, therefore relieving some of the financial stress many are under while rates remain high.
If you’re worried about this process, or not sure you have what it takes to refinance, you might find the support of a mortgage broker reassuring. Refinancing is a significant part of their job, so they know the process inside and out, and it’s usually free, which is a great help at times like these.
Debt mediation
Many people are just not aware of all that can be done to keep you and your finances going until you can get back on your feet.
If you’ve tried all the obvious strategies but are still worried things aren’t going to work out, try contacting a debt mediator. Debt mediators are negotiators who work with you to find ways forward when, despite your best efforts, you or your business really are financially stuck.
Negotiators aim to improve their clients financial well-being and overall quality of life by assessing your financial situation and gathering evidence like income, expenditure, and payslips to negotiate with banks.
As Mark Bouris says, debt negotiation needs to be talked about.
‘It’s not a discussion we normally have, but it’s quite timely given what’s going on in Australia at the moment.’
‘I think people out there might be getting close to needing someone’s help, so I would say to them, if you feel as if you’re getting into trouble, then go and see someone like Lawrence Hugo.’
It helps to stay in the know. For the latest insights and analysis, make sure to download the Y Home Loans app and tune into Property Insights.
