Back
~
1
min read
· Posted on
February 21, 2024

The Reserve Bank of Australia has paused the cash rate this month and mortgage payers rejoice old-el-paso style!

The RBA has put a pause on the cash rate at 4.10% for this month.

What's the key learning?

  • RBA putting a pause on the cash rate 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.
  • There are 1.3 million Australians who will face the mortgage cliff during the rest of 2023 and 2024.

👉 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.

What's the key learning?

💡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.

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating
No items found.