Where to from here?

By Gerard Tiffen
With unemployment still weak and inflation flat, I personally think interest rates should still drop. And if it wasn’t for the booming house prices in Sydney, Perth and Melbourne I think it would. Unfortunately, we may have hit the bottom. 
This graph I found on the ASX website shows the cash rate futures markets on the economy is VERY POSITIVE suggesting that some time late in 2014 interest rates will begin to go UP.
With Australia having the lowest Financial Risk Factor in the world and the second strongest Finance and Banking regulation it’s no real surprise that in the latest survey of World Economic Forum – Australia is rated as having the world’s fifth most stable and sound banking sectors. 
This stability may have contributed to our historically cash rate low of just 2.5% that August brought. It is amazing to see the difference a year makes, when you consider that this time last year we thought rates were impressively low with a cash rate of 3.5% and an average standard variable rate of 6.83%. Compare that to the current average standard variable rate of the big 4 sitting at 5.92%.
This means that it’s a great time to revisit your finances and go see your Mortgage Broker for a review. With lenders currently offering extremely competitive fixed rates, application fee specials and rebate incentives, now might just be the time to choose a fixed interest rate product to have some repayment certainty – at least for the next 1-3years.
On a side note, during all the rate reductions we’ve had, I don’t ever recall receiving a letter advising that my credit card interest rate was being reduced. While the SVR has reduced by 0.91%, average credit card rates have reduced by only 0.05%. But that might be another topic for another day!

Gerard Tiffen is a multi award winning broker and has been a permanent fixture in the Top 10 Brokers in Australia for the past 11 years.

As Managing Director of Tiffen & Co, Gerard specialises in sourcing and structuring a wide range of home and investment finance packages for his clients.

Gerard has always been interested in property and is an avid property investor himself – over the past 15 years Gerard has amassed a property portfolio in excess of $10,000,000. His willingness to share his personal and professional expertise with his clients is unsurpassed. He understands that structuring finances correctly from the outset will ultimately save time and money, as well as make it easier to diversify your investment portfolio in the future.