Interest rates today took another quarter of a per cent drop, stooping to their lowest levels since 1959.
The cash rate now stands at 2.5 per cent as the Australian economy learns to live without the mining boom.
Below average growth and receding commodity prices are being cited as the catalyst for the RBA to cut the cash rate by 25 basis points for the second time this year.
The major banks are all moving to pass on the cut in full quickly, with Westpac even passing on a larger cut of 28 basis points.
Comments from Reserve Bank (RBA) governor Glenn Stevens were widely interpreted as leaving the door open for a possible further cut despite such record low rates.
Mr Stevens also welcomed any further drop in the value of the Australian dollar, which he said was still quite high, and would re-balance growth in the economy if it continued to fall.
The possibility of further rate cuts makes it a tough decision for home buyers on whether to take a fixed or variable loan for their property.
While the fixed rate loan locks in record low interest rates for a period of time, they can restrict the ability to pay extra payments off the loan, which is always a great idea in times of low interest rates, as well as locking them out of the benefits of any further cuts.
Either way, home owners and those wishing to buy real estate will be smiling at today’s news from the RBA.
