Rate cut urges first home buyers in Melbourne to buy homes

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Thanks to RBA's recent rate cut that saw the official cash rate at a record low of 1.75 per cent, buyers are suddenly clamouring to score the best house prices, according to several Melbourne-based real estate agents.

"It's pretty exciting news and what we've noticed is an immediate spike in both email, SMS, phone inquiry, participation, open for inspections, the very next day," said Darren Dean, Sweeney agent.

However, buyers themselves expressed reservations. For first home buyer Dana, the lower interest rates would allow for a little more flexibility.

"I think a lot of people will try to get into the market at this point in time and take advantage of the low interest rates," she said. "Looking in the long term, rates can always rise so it's something that people have to be aware of."

Caitlin Graham, the brand new buyer of a $520,000-house in Southampton Street in Footscray, said that the rate cut did not affect her decision to buy. "I think when you're looking to buy a first house, you just take what you can get," she said.

According to Finder.com.au, the rate cut will shave off close to $700 a year in repayments on the average mortgage in Victoria.

Still, agent Karen Price said that it might take some time before people see the full effects of the cuts. "It will affect the market in that there will be more buyers coming into the market and more investors," she said.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

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