The bond market’s dire mortgage warning is at odds with the RBA
If Australians could fix their mortgages “US style” for 30-years as some have suggested they should, we would be staring at decade high home loan rates.
Borrowers are still rejoicing after this week’s much-welcomed interest rate cut from the Reserve Bank was delivered with the expectation that there is more to come.
The RBA’s 25 basis point cut dropped the cash rate to 3.85 per cent, which reduced standard variable mortgage rates to about 6 per cent. But with the market now anticipating at least two more reductions by year-end, it should drop that home loan rate to between 5.25 per cent and 5.5 per cent.
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Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney. Connect with Jonathan on Twitter. Email Jonathan at jonathan.shapiro@afr.com
