Society & Culture Interest rate cuts

[hamohawk1]

Exactly why are they seemingly always judged a good thing by the media? For the vast majority of us who don't have a home loan they a cut doesn't exactly spell gain. More Australians would have bank accounts and other vested interests that would gain from interest rates being at a higher level than low.

 

[Hamingja]

It's a killer for me. I'm going to empty my online saver and wipe off some of my HECS. The inflation rate will equal the interest rate soon. When you take into account that you pay tax on interest income, online savers are pretty useless atm.

 

[JuddsABlue]

I have a mortgage so I like them obv, but the difference is minimal (my payments dont actually go down, but long term is obv saves me money as my homeloan will be paid quicker)

Plenty on this board will tell you why its a bad thing and why the banking system is bad and everything is bad bad bad

 

[UFO Tatsu]

Exactly why are they seemingly always judged a good thing by the media? For the vast majority of us who don't have a home loan they a cut doesn't exactly spell gain. More Australians would have bank accounts and other vested interests that would gain from interest rates being at a higher level than low.

Just moved to a fix rate loan

 

[Scotland]

Exactly why are they seemingly always judged a good thing by the media?

Less money going out each month for your average mortgage belt punter who the media aim at.

A lot more people watch 7 News and ACA than read the Fin Review.

For the vast majority of us who don't have a home loan they a cut doesn't exactly spell gain. More Australians would have bank accounts and other vested interests that would gain from interest rates being at a higher level than low.

I'm not sure of the figures of renters vs mortgage slaves vs outright owners, but lower interest rates = lower home loan repayments for all, including those with investment properties.

Lower interest rates also mean lower returns on savings and potential devaluation of the currency in FOREX.

 

[little graham]

The lower the rate to encourage people to spend their money and not save. When they're this low it means the economy is in trouble.

 

[Bunk Moreland]

Exactly why are they seemingly always judged a good thing by the media? For the vast majority of us who don't have a home loan they a cut doesn't exactly spell gain. More Australians would have bank accounts and other vested interests that would gain from interest rates being at a higher level than low.

The media you speak of have a large audience in suburban mortgage belts.

 

[craigos]

does i buy house now?

 

[Syrah]

does i buy house now?

Yes. If you don't own a house buy one now. If you already own a house, go to Harvey Norman and buy the TV with the biggest screen you can see.

 

[MarcusP2]

Buy seven mate, get on the property ladder.

 

[craigos]

Yes. If you don't own a house buy one now. If you already own a house, go to Harvey Norman and buy the TV with the biggest screen you can see.

Buy seven mate, get on the property ladder.

I already own a 54cm CRT so am pretty set for a TV. Houses in Broadmeadows are cheap, seems like a good area. Time to become the next Donald Trump

 

[little graham]

Joe Hockey on interest rate cuts.

 

[Catfish Alley]

The lower the rate to encourage people to spend their money and not save. When they're this low it means the economy is in trouble.

Exactly. Not a good thing because it means they need to stimulate the economy. They cut the rate here too. I already locked my mortage in but was lucky enough to get a decent rate.

 

[Mofra]

Not just mortgages - margin loan rates will be cut and there is an inevitable boost to the stockmarket as dollars are shifted away from the increasingly low fixed-rate returns in lieu of dividends which are paid far in excess of interest rates currently.

It may not be the last cut this year - many major bank economists predicted 2.0% flat by the end of this year

 

[BEEG]

Very interesting see how it all plays out now

 

[Scotland]

Ideally you don't want the cash rate to be too low because it gives you another tool to play with.

If your cash rate is 5% and the economy functions borrowing at 7% (give or take) and things go to poo, then you can always cut it to reduce the cost of borrowing.

Once you start getting to 2% and below you don't have much room to move. Unfortunately the mortgage belt seems to operate on the 'lower rate = borrow more' principle. I'm curious to see when rates will start going back up towards 2011/12 levels let alone to 7% and above.