Final 2018 cash rate call revealed

Australia’s top economists all saw the hold coming for the month, including My Housing Market’s Dr Andrew Wilson, who said November was the last chance to stop the increasing market softening of housing markets.

As the month came and went with price declines still a reality, Dr Wilson said the rates are set to be on hold with rates unlikely to decline any further, especially with the possibility of the global economy reaching a downturn.

Saul Eslake on the other hand, said while the RBA is optimistic about economic growth, conditions are only ‘gradually’ improving.

“Some of its recent commentary appears to indicate slightly greater near-term concerns with regard to the possible consequences of declining property prices and greater risk aversion on the part of lenders,” Mr Eslake said.

“All of this suggests that an increase in rates is still some way off.”

In fact, John Kolenda, managing director of 1300HomeLoan, said the current RBA rate could hold for an entire decade.

“Since the central bank last lifted official rates there have been 12 rate reductions, with the RBA now staying on the sidelines for more than two years,” Mr Kolenda said.

“With no evidence of a significant improvement in the domestic economy, many forecasters expect the cash rate will remain on hold through 2019 and also the following year.

“That means a whole generation of mortgage holders could go an entire decade without seeing official rates rise, although they will have experienced out of cycle rate movements from lenders

What does this mean for my mortgage?

Despite the prospect of rates being on hold for a decade, Mr Kolenda said mortgage holders do not need to be worried.

"The RBA has done a very good job, initially to negotiate the global financial crisis and then to navigate the ups and downs we have faced over the years," he said to Smart Property Investment.

With the finance environment difficult to navigate, borrowers may be relieved to know that there is still strong competition between lenders for business, according to Mr Kolenda, especially for those experiencing rate rises.

However, it is up to the investors to seek out where to find the best deals.

“My message to mortgage holders is ‘never be complacent’. You should always be looking for the best home loan deal,” Mr Kolenda said.

“Contact a mortgage broker to make sure you are getting the best terms possible and, most importantly, save money.”