Rate cut signals good time to enter house market: Lenders
03 Feb 2009 3:24 PM
SYDNEY, Feb 3 AAP - Conditions have rarely been better for first home buyers but caution must be exercised before taking on debt, the Mortgage and Finance Association of Australia (MFAA) says.
The cash rate is at its lowest level since February 1964 after the Reserve Bank of Australia cut the rate by 100 basis points to 3.25 per cent.
MFAA chief executive Phil Naylor said low rates, coupled with government incentives and falling house prices, made it a prime time to enter the housing market.
"As well as bringing further relief to existing borrowers across the country, today's rate cut makes a strong case for people considering entering the market to make the leap," Mr Naylor said.
But he warned that uncertain economic conditions prevail.
"The big unknown is the impact job security will have on deterring people from entering the market," Mr Naylor said.
"It is possible that people feeling unsure about the state of the economy and the future of their job will put off taking up a new loan."
Home buyers or those looking to adjust their mortgage repayments should seek assistance from their mortgage broker or provider, he said.
