The pandemic recession will end up delivering savings worth tens of thousands of dollars to the nation's home buyers due to a collapse in mortgage interest rates, but will also cruel the savings plans of millions more.
At the start of the year a person with a $300,000, 25-year mortgage faced an average variable mortgage rate of 3.73 per cent. The monthly repayments on such a loan were $1539 and over the life of the mortgage the buyer would repay $461,739. The Reserve Bank has signalled it is not expecting to increase official interest for at least 3 years.
Low rates are expected to be the norm for coming years. The Reserve Bank has signalled it is not expecting to increase official interest for at least three years. The average regular saving rate was 1.12 per cent at the start of the year but it is now just 0.43 per cent. For a person with $10,000 in their account, the drop in interest equates to a $740 in compound savings over a decade.
Source: Loan Digest (loandigest.net)
Savers should just invest in shares. Fixed.
Not helpful if you have just lost your job , and find yourself on the reduced job seeker to support your family