Rates to go up at least 0.5%

Interest rates are about half of one per cent below long term average levels said the deputy governor of the Reserve Bank of Australia Phillip Lowe. Borrowers should expect the central bank to move interest rates back to more normal levels said Mr Lowe.

“The important thing is the level of interest rates that borrowers face, not the cash rate,” Dr Lowe said. “At the moment the mortgage rate is still around 50 basis points below the average for the last decade, so the mortgage rate is getting close to the average but it is still below the average.” Lowe also said that more resources needed to be devoted to housing if price pressures were to be avoided.

Source: Herald Sun

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