Explaining what the official cash rate is

Each day banks borrow money from each other to manage their cash flow requirements. The “cash rate” is the interest rate the banks charge each other over night.

 At its first meeting for the year, the Reserve Bank of Australia (RBA) decided to cut the official cash rate by 25 basis points, bringing it to a record low of just 2.25 per cent.

Rates had been on hold since August of 2013, creating a very low interest rate environment which stimulated property markets across Australia throughout 2014. With this most recent rate cut, we can expect our property markets to perform very well again this year, with investors and home owners looking all set to enjoy significant capital gains on home prices as well as savings on their mortgage repayments.

We’ll be keeping our finger on the pulse for the best mortgage deals available in the market, as lenders release new offers and rates. So stay in touch with us to get the latest news on what’s available in the mortgage market – and remember, we’re here to help you get the very best rate and help you achieve your financial goals in 2015!