Portfolio Media Releases

WELCOME RELIEF FROM THE RBA BUT MORTGAGE HOLDERS STILL HURTING

2nd February 2010

But the reason for their decision will provide little comfort to homeowners.

In its Statement on Monetary Policy, the Reserve Bank indicates that a key reason for today’s decision appears to be the fact that:

“Lenders have generally raised rates a little more than the cash rate over recent months and most loan rates have risen by close to a percentage point.”

Treasurer Swan’s woeful attempts to lecture the banks have been completely ignored.

This means that even despite today’s welcome pause, mortgage holders are still feeling the pain of an average 0.9 per cent increase in interest rates since May last year. 

That’s around $3,150 extra in interest repayments for an average $350,000 mortgage.

The RBA’s statement also notes:

“If economic conditions evolve broadly as expected, the Board considers it likely that monetary policy will, over time, need to be adjusted further in order to ensure that inflation remains consistent with the target over the medium term.”

The message is clear - further rate rises are coming.

The Rudd Labor Government must pull back on its reckless and wasteful spending to relieve upward pressure on interest rates.

Kevin Rudd and Wayne Swan would rather see financial pain borne by homeowners and small business than bear the political pain of making tough decisions.

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