More rate cuts needed: borrowers

According to a new poll by Loan Market Group, 50 per cent of Gen Y respondents believe the two consecutive monthly reductions by the RBA hadn’t made any difference to them.

Another 32 per cent of Gen Y-ers said they had just been boosting their savings but more rate cuts by the RBA were needed.

Loan Market corporate spokesman Paul Smith said the European debt crisis was also weighing heavily on Gen Y consumers.

“While consumers and home owners are always looking for interest rate relief, the latest round of cuts has yet to influence the cautious and subdued mindset of Australians,” he said.

“Successive RBA actions which reduced the cash rate to 3.5 per cent will certainly be helpful to offset the rising costs of living; however there are larger shifts needed in the economy to boost stalling sectors such as retail and housing.

“The pressure is on the RBA to further reduce the official rate at its next monthly board meeting and then we will see if this is passed on in full by lenders.”

The Loan Market online survey found 15 per cent of respondents said they had been spending more as a result of lower interest rates while 7 per cent said they had been paying more off their mortgages.