Mortgage holders may see another rate rise in November after a shock drop in the country’s unemployment rate put pressure on the Reserve Bank of Australia to raise the official cash rate at its next board meeting.
New figures released by the Australian Bureau of Statistics have revealed the unemployment rate has dropped back to 5.7 percent over September, from 5.8 per cent in the previous month.
The drop took economists by surprise, with most expecting the jobless rate to go up to 6 per cent, as employers hold tight on costs while the economy is in recovery mode.
Economists now believe that another rate rise might be imminent.
In an interview with Mortgage Business, RP Data’s head of property research Tim Lawless said that it made sense that RBA should move interest rates from historic lows, and most mortgage holders would have factored in a more normal mortgage rate into their budget.
Australia’s big four banks, ANZ, National Australia Bank, Commonwealth Bank and Westpac have all matched the Central Bank’s rise from Tuesday, but Loan Market Executive Director John Kolenda said mortgage holders should also be prepared for the major banks moving rates up ahead of an RBA decision because of escalating funding costs.
Mr Kolenda said mortgage holders can save money in the long term by making extra repayments now while interest rates were still relatively low.
Sources: Mortgage Business, News.com.au
