Employment rose 20,400 in the past month, all but putting an end to speculation that mortgage holders will be delivered an interest rate cut on Melbourne Cup Day. But will mortgage-holders be dealt a slashed-rate Christmas bonus?
Australian Bureau of Statistics (ABS) figures show that the national unemployment rate fell to 5.2 per cent in September, from an unrevised 5.3 per cent in August.
Stephen Roberts, chief economist with financial services group Nomura, confirms that the better than expected jobs data means there is "very little likelihood" of the RBA changing the cash rate from its current 4.75 per cent at its November meeting.
“What it suggests is that concerns about the softness in the labour force may have been overdone and we may even be starting to see signs toward better employment conditions,” Roberts says.
Borrowers who are hoping that a rate cut may be delivered at the Reserve Bank’s December meeting are likely to be disappointed, he adds.
He doesn't expect any move in the cash rate until 2012, a sentiment backed up by TD Securities head of Asia-Pacific research, Annette Beacher.
“Despite wild swings in global financial markets in recent months, RBA Board communiqué has been balanced with a neutral bias throughout, and recent senior RBA staff speeches continue to voice outright optimism,” she says.
“This ongoing brave public face supports our current view of the RBA remaining on hold at 4.75 per cent for quite some time.”
If you’re one of those mortgage holders who has grown tired of holding your breath at 2.30pm on the first Tuesday of every month, may want to consider fixing part or all of your mortgage. At the moment, you can benefit from the rare occurrence of accessing historically low fixed rate mortgages that are well below variable rates.
Interest rates for 3-year fixed interest rates are currently as follows, but with lenders amending their rates almost daily (St George chief executive Rob Chapman admits the bank has cut its 3-year rate five times since July), it pays to check with your bank or broker before making the move:
- St George (owned by Westpac): 6.39%
- CUA: 6.34%
- Westpac: 6.44%
- NAB: 6.44%
- RAMS: 6.39%
- ANZ: 6.43%
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker