Experts are now saying that your home could cost you less this year. How? Home loan repayment interest rates are said to drop this 2015.
Finder.com.au recently conducted a survey which resulted in nine experts all saying that there could possibly be a cash drop in the coming year ahead. Previously, six of those experts said the exact opposite.
If this becomes a reality, it will be a welcome piece of news for homeowners who are currently paying for their homes with variable interest rates.
Michelle Hutchison, finder.com.au money expert, said homeowners could be seeing savings of up to $50 per week on a $300,000 home loan should there be a 25 basis point drop in interest rates.
Just last week, Ms. Hutchison reported that a majority of the economic experts who joined the survey agreed that there will not be a drop in 2015 interest rates. However, recent reports about the state of the Australian economy have prompted them to revisit and revise their initial forecasts.
Those reports include an expected increase in unemployment rates, the Australian dollar currently being low, the GDP going below trend, and the lack of non-mining spending.
According to Ms. Hutchison, lower interest rates could help revitalise the property market, leading to greater competition, and higher bids at auctions since buyers will become more confident with their borrowing power.
The increased affordability is the most important factor and end result of the drop in interest rates. It will give buyers and homeowners with existing home loans more reason and capacity to get into the property market.
Ms. Hutchison stressed however, that despite the expected drop, interest rates will eventually go back to normal and be on the rise again, so buyers need to ensure they are prepared and willing to pay for the additional repayments. A reliable real estate broker may be enlisted for pertinent advice on the issue before making any big decisions.
Article originally published as: Property values may continue to rise but your home could cost you less next year if expert predictions come true