The RBA has put a pause on the cash rate at 4.10% for this month.
👉 Background: The Reserve Bank of Australia has raised the interest rate in 12 of the previous 14 months. And this has taken the cash rate from a low 0.1% all the way to 4.10%.
👉 What happened: The inflation rate for the previous quarter jumped just 0.8%, or 6% annually — which is low, considering the jump in previous quarters. So now, the RBA has put a pause on the cash rate at 4.10% for this month.
👉 What else: But the Governor warned that this still may not be the peak. Even so, this is good news for millions of Aussies who are still facing a fixed-rate mortgage cliff.
💡The fixed-rate mortgage cliff refers to customers who locked in fixed-rate mortgages at record low fixed rates. But these rates are only 'fixed' for a period of time (usually two years).
💡But now, these customers are coming off their fixed rate period and jumping onto the new interest rate. This could see rates jump from 1.95% to nearly 6.00%.
💡There are 1.3 million Australians who will face the mortgage cliff during the rest of 2023 and 2024. So, this cash rate pause is a breath of fresh air for those who are on the cliff.
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