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One in two Australians would pay down more of their mortgage if the Reserve Bank was to signal a rate cut, new research has found.
A national survey of more than 1,000 home owners and investors commissioned by Mortgage Choice found 50 per cent would contribute more to their home loan if rates were to fall over the coming months.
An additional seven per cent said that while they would spend more in the case of a rate cut, they would also save more by contributing extra to their home loan.
“Our national survey discovered only one in five of the 1,000-plus respondents, all of whom were mortgage holders, will spend more if interest rates drop,” Mortgage Choice spokesperson Kristy Sheppard said.
“In fact, every second person will simply contribute all extra funds into their home loan.”
Mortgage Choice said it supported the RBA’s decision to keep interest rates on hold in September, and it expected to see an increase in consumer and business confidence, Ms Sheppard said.
“Sanity prevailed with September’s cash rate decision. It should lead to improved consumer and business confidence as spring moves in,” she said.
“A rate rise would have increased the financial strain on businesses within housing, manufacturing, retail and many other industries. Ongoing rate stability will hopefully see them move to steadier ground, to a position where they feel less pressure to cut employee hours or reduce staff numbers.”
Mortgages are loans that are used to buy homes and other real estate where the property itself serves as collateral for the loan.
Mortgages are loans that are used to buy homes and other real estates where the property itself serves as collateral for the loan.