Rate increase before the end of the year?

The big financial news for October, and more importantly the good news for mortgage borrowers, was the Reserve Bank’s decision to keep the cash rate unchanged.

“This was undoubtedly a surprise to the market,” says Scott McWilliam, Homeloans’ general manager of funding and operations.

The expectation of interest rates going up was so great that, in the hours leading up to the RBA decision, the Futures market was pricing a 75% chance of a 25 basis point rate hike.

However, just because the RBA elected not to increase the cash rate in October doesn’t mean that it will do the same later in the year. Read more...