If you didn’t back a winner on Melbourne Cup Day then fret not: the Reserve Bank of Australia (RBA) has delivered mortgage holders a win by cutting the official cash rate by 15 basis points to a new record low of 0.10%.
RBA Governor Philip Lowe says the cash rate cut is part of a package of measures to support job creation and economic recovery from the COVID-19 pandemic.
“Given the outlook for both employment and inflation, monetary and fiscal support will be required for some time,” Governor Lowe said in a statement.
As such, Governor Lowe added the low cash rate is likely here to stay until actual inflation is sustainably within the 2 to 3% target range.
“Given the outlook, the board is not expecting to increase the cash rate for at least three years,” Governor Lowe said.
Want to know what this rate cut means for your home loan?
This is the last rate cut the RBA is able to make before venturing into negative territory (which it’s previously indicated it won’t do).
It’s also the sixth RBA rate cut since June 2019, which means if you haven’t had a home loan health check in the past year, there’s a good chance you’re paying more interest than you need to on your home loan each month.