The RBA today has decided to hold interest rates unchanged at 1.00%. Not a lot of change in the commentary from last month in the note as the RBA is on pause and will reassess the effects of the last 2 rates cuts.
Here is the summary of what the RBA said:
The global economy outlook is reasonable although risks are to the downside due to trade and technology disputes.
China has supported its economy.
Financial conditions in advanced economies remain expansionary with some central banks reducing interest rates this year.
Australian economy is expected to grow 2.5% over 2019 [which is above the 1.8% for 2018].
Australian unemployment rate is 5.2% with a recent uptick without inroads into the spare capacity.
Inflation over the last 12 months only 1.6% but expected to increase to around 2% next year which is still very low.
Most lenders have updated their servicing calculators to increase the borrowing power for people. For Orange Finance clients who have been looking to purchase or refinance existing properties, on average, their borrowing power has increased 15-20% which is a lot. Typically this affect single income households more as double income households rarely needed all the borrowing power previously anyway.
In addition to this, some of the lenders with the most favourable borrowing calculations also have some of the lower interest rates available which is causing their assessment time frames to double.